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• Landbanking activities going strong, KLCC still popular
• Redevelopment of Kampung Baru approved. Potential beneficiaries: GLC developers
• Redevelopment of prime government land and robust residential sales could re-rate sector
• Maintain positive view, top picks: SP Setia, E&O, MRCB
Landbank replenishment reflects developers’ confidence. Residential sales have remained robust despite interest rate hike and reintroduction of real property gains tax. Developers are actively looking for landbank (even in KLCC which will see massive incoming supply over next two years), supported by stronger balance sheets. Land prices have been holding up - Kuok family just sold 1.6 acres at Jalan Perak for RM2200psf, similar to prices paid in 4Q09 by Ireka (1 acre at Jalan Kia Peng, RM2200psf) and Dijaya (1.3 acre at Jalan Ampang, RM2000psf).
Redevelopment of Kampung Baru to stir interest. The Cabinet has finally approved the redevelopment of 375-acre Kampung Baru (oldest Malay residential area in KL). Kampung Baru Development Corporation will be set up after Parliament’s endorsement, while GLC developers will be identified to spearhead the project. PNB, Yayasan Amanah Harta Bumiputra and other related bodies will act as development agents/trustees of the Malays. Although this could be a long-drawn affair (80% of ~5000 lot owners need to agree), we see this as a first step for enbloc development in Malaysia which will release prime land for redevelopment.
Prime government land in Klang Valley up for grabs. Several land parcels at Jalan Stonor, Jalan Ampang and Jalan Lidcol have been identified for tender to the private sector. Others mentioned in Budget 2010 include Jalan Cochrane, Jalan Stonor, Brickfields, and Bukit Ledang (off Jalan Duta). We also expect the 3000-acre RRIM land in Sungai Buloh (to be developed by government-EPF JV, estimated GDV ~RM15b) to be carve into several parcels to attract private sector participation.
Biggest winners: GLC/Bumi companies. Potential beneficiaries of Kampung Baru and government land redevelopment could include: a) MRCB (41%-owned by EPF); b) PNB-related companies (Sime, SP Setia, Mah Sing); c) UEM Land (77%-owned by Khazanah); and d) Glomac. We also do not discount the possibility of developers with strong brandname and track record as potential JV partners eg E&O, Sunrise, YTL.
• Redevelopment of Kampung Baru approved. Potential beneficiaries: GLC developers
• Redevelopment of prime government land and robust residential sales could re-rate sector
• Maintain positive view, top picks: SP Setia, E&O, MRCB
Landbank replenishment reflects developers’ confidence. Residential sales have remained robust despite interest rate hike and reintroduction of real property gains tax. Developers are actively looking for landbank (even in KLCC which will see massive incoming supply over next two years), supported by stronger balance sheets. Land prices have been holding up - Kuok family just sold 1.6 acres at Jalan Perak for RM2200psf, similar to prices paid in 4Q09 by Ireka (1 acre at Jalan Kia Peng, RM2200psf) and Dijaya (1.3 acre at Jalan Ampang, RM2000psf).
Redevelopment of Kampung Baru to stir interest. The Cabinet has finally approved the redevelopment of 375-acre Kampung Baru (oldest Malay residential area in KL). Kampung Baru Development Corporation will be set up after Parliament’s endorsement, while GLC developers will be identified to spearhead the project. PNB, Yayasan Amanah Harta Bumiputra and other related bodies will act as development agents/trustees of the Malays. Although this could be a long-drawn affair (80% of ~5000 lot owners need to agree), we see this as a first step for enbloc development in Malaysia which will release prime land for redevelopment.
Prime government land in Klang Valley up for grabs. Several land parcels at Jalan Stonor, Jalan Ampang and Jalan Lidcol have been identified for tender to the private sector. Others mentioned in Budget 2010 include Jalan Cochrane, Jalan Stonor, Brickfields, and Bukit Ledang (off Jalan Duta). We also expect the 3000-acre RRIM land in Sungai Buloh (to be developed by government-EPF JV, estimated GDV ~RM15b) to be carve into several parcels to attract private sector participation.
Biggest winners: GLC/Bumi companies. Potential beneficiaries of Kampung Baru and government land redevelopment could include: a) MRCB (41%-owned by EPF); b) PNB-related companies (Sime, SP Setia, Mah Sing); c) UEM Land (77%-owned by Khazanah); and d) Glomac. We also do not discount the possibility of developers with strong brandname and track record as potential JV partners eg E&O, Sunrise, YTL.
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