AmInvestment Bank maintains ”overweight” call on property sector

AmInvestment Bank maintains ''overweight'' call on property sector

KUALA LUMPUR, Jan 7 — AmInvestment Bank has maintained its “overweight” call on the property sector following 1Malaysia Development Bhd’s (1MDB) proposed sale of a 60% equity stake in the Bandar Malaysia project.

The research house noted that based on this recent development, it estimates the implied land value for the project to be RM583 per sq ft from RM697 previously.

“That said, a successful rollout of Bandar Malaysia will be a boost to property market sentiment and set a benchmark for land value within the surrounding land areas,” AmInvestment said in a note Thursday.

The research house said it believes that the indicative selling price of the project to be tad under RM2,700 per sq ft, which could be somewhat aggressive, given the green field status of its surrounding areas.

“However, execution is the key and the estimation is based on the given size and magnitude of the project, by assuming an efficiency factor of 65% and indicative gross development value of RM150 billion,” it added.

1MDB has proposed to sell a 60% equity stake in the Bandar Malaysia project to Iskandar Waterfront Holdings and China Railway Engineering Corp consortium (CREC) (IWH-CREC Joint Venture).

— BERNAMA

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