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BANDAR RAYA DEVELOPMENTS BHD
• Bandar Raya Developments Bhd (BRDB) announced on Friday it had entered into a JV with Country Heights Land Sdn Bhd (CHLSB) to develop 66 parcels of leasehold land measuring 47.6 acres at Bluwater Estate,The Mines in Seri Kembangan.
• Bluwater Estate is a guarded and gated residential development – owned by CHLSB - spans over 248 acres comprising bungalows, semi-detached, villas built around a 51 acres lake.
• BRDB would have a 75% stake in the JV and the JV has also entered into a separate sales & purchases agreement (SPA) with vendors to acquire the said land for RM160mil or RM77psf.
• We understand the JV intends to develop 310 semi-detached homes and 13 units of bungalows and the development would have a GDV of RM652mil. There was no exact guidance on the prices for the units, but from our channel checks bungalows at Bluwater Estate are going at an average RM450psf-RM500psf.
• The group’s layout plan for the development has been approved by the local authorities and is targeted for launch in 4Q2011 with expected development period of five years.
• We are positive on this development mostly because of the high demand for guarded and gated concept and its favourable location where it is connected by four major highways such as MRR2, North South Highway and SILK. There are also two international schools nearby that should be one of the key selling points.
• Secondly, this new landbank would reduce BRDB’s earnings risks as its projects are mostly focused on developments that are plagued with oversupply concerns i.e. high-rise residential units in KLCC and Mont Kiara/Dutamas and office buildings.
• At 26% projected margin as guided by the group, this project would lift our FY12F earnings by 12% to RM173mil while our NAV would jump by about 10% to RM3.20.
• Our HOLD rating is maintained with our fair value of RM1.94/share is under review pending a company visit.
• Bandar Raya Developments Bhd (BRDB) announced on Friday it had entered into a JV with Country Heights Land Sdn Bhd (CHLSB) to develop 66 parcels of leasehold land measuring 47.6 acres at Bluwater Estate,The Mines in Seri Kembangan.
• Bluwater Estate is a guarded and gated residential development – owned by CHLSB - spans over 248 acres comprising bungalows, semi-detached, villas built around a 51 acres lake.
• BRDB would have a 75% stake in the JV and the JV has also entered into a separate sales & purchases agreement (SPA) with vendors to acquire the said land for RM160mil or RM77psf.
• We understand the JV intends to develop 310 semi-detached homes and 13 units of bungalows and the development would have a GDV of RM652mil. There was no exact guidance on the prices for the units, but from our channel checks bungalows at Bluwater Estate are going at an average RM450psf-RM500psf.
• The group’s layout plan for the development has been approved by the local authorities and is targeted for launch in 4Q2011 with expected development period of five years.
• We are positive on this development mostly because of the high demand for guarded and gated concept and its favourable location where it is connected by four major highways such as MRR2, North South Highway and SILK. There are also two international schools nearby that should be one of the key selling points.
• Secondly, this new landbank would reduce BRDB’s earnings risks as its projects are mostly focused on developments that are plagued with oversupply concerns i.e. high-rise residential units in KLCC and Mont Kiara/Dutamas and office buildings.
• At 26% projected margin as guided by the group, this project would lift our FY12F earnings by 12% to RM173mil while our NAV would jump by about 10% to RM3.20.
• Our HOLD rating is maintained with our fair value of RM1.94/share is under review pending a company visit.
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