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- Sunway, via its fully-owned subsidiary Sunway Labuan Investment, signed an agreement to buy MCL for S$738.7 million (RM2.4 billion) in cash. The deal significantly expands Sunway’s presence in Singapore, increasing its projects there from four to nine.
KUALA LUMPUR (Sept 19): Sunway Bhd’s (KL:SUNWAY) acquisition of Hongkong Land (MCL) Holdings Ltd [MCL] will more than double its total project value in Singapore to RM15.3 billion.
Sunway, via its fully-owned subsidiary Sunway Labuan Investment, signed an agreement to buy MCL for S$738.7 million (RM2.4 billion) in cash. The deal significantly expands Sunway’s presence in Singapore, increasing its projects there from four to nine.
Hong Leong Investment Bank in its note said effective unbilled sales will also rise sharply from RM3.29 billion to RM7.47 billion.
MCL, which focuses mainly on Singapore, has five ongoing projects worth S$2.96 billion with about 2,700 units and a strong 90% take-up rate. These projects are expected to be completed between 2025 and 2028. It currently holds no undeveloped land bank in Singapore.
In Malaysia, MCL has three ongoing projects with an effective GDV of RM684 million. It owns a remaining 69 acres in Wangsa Maju and 92 acres in the Forest Heights township, Seremban (via a JV with UEMS).
“In Singapore, land parcels are highly costly, requiring substantial upfront capital, which makes joint ventures and partnerships a common practice among developers in order to diversify project risks,” according to HLIB. This is also reflected in MCL’s existing portfolio, where all five ongoing projects are held via 49%-51% stakes in partnership structures such as CDL, Sinarmas Land and CSC Land.
MCL was established in 1963 and has developed 48 residential projects in Singapore and Malaysia since 1992. It has developed 42 projects in Singapore alone.
Overall, analysts said the timing of the acquisition is viewed as strategic with completion targeted for the fourth quarter of 2025, ahead of Sunway’s planned healthcare arm listing in the first quarter of 2026.
“As the MCL acquisition is immediately earnings accretive, it helps to mitigate the earnings dilution impact of the healthcare listing, while simultaneously providing a sustained uplift to group earnings heading into FY2026 (the financial year ending Dec 31, 2026),” HLIB said.
Further, the deal also strengthens Sunway’s ability to exert greater control over its Singapore property operations and to develop more integrated projects, CIMB Research echoed.
“The combined presence of MCL—which predominantly develops medium- to upper-medium-end private residential products priced around S$2,500 to S$2,600 per sq ft — would reinforce Sunway’s strategic positioning within this segment when integration is completed,” CIMB said. It added that Sunway is still expected to explore landbanking opportunities with its current joint-venture partners if project scale and type are mutually beneficial.
Sunway’s acquisition of MCL is expected to boost net profit by 6.1% to around RM1.2 billion, based on pro forma FY2024 figures. This assumes RM52 million in annual interest from borrowing RM2.4 billion (S$721 million) to fund the purchase. As a result, its net gearing will rise to 55%, up from 41% at end-2024.
However, Sunway plans to offset part of the cost in FY2026 through:
*Nearly S$300 million in expected cash inflow from three Singapore projects nearing completion, and
*Proceeds from listing its Sunway Healthcare Group.
“While the acquisition bodes well for Sunway’s expansion in Singapore and provides a stable outlook for mid-market residential property, we think most positives are already priced in and near-term upside may be limited,” said MBSB Research.
Sunway’s shares have climbed 12% year to date, touching a historical high of RM5.40 on Sept 17. Analysts remain divided on the counter, with six assigning a 'buy' rating and the remainder assigning 'hold' and 'sell' ratings. The stock’s 12-month consensus target price stands at RM5.45, suggesting limited upside from the current RM5.35.
As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.
