KUALA LUMPUR: GLOMAC BHD’s earnings for the financial year ending April 30,2020 (FY20) is expected to improve on better leasing rates at its Glo Damansara shopping mall.
According to Maybank Investment Bank Research, the leasing rates of the property group’s shopping mall in Petaling Jaya, Selangor, are expected to increase to 74% from 45% in FY18.
The research house said in its latest report that elsewhere, Glomac’s recent launch of 121 Residences received overwhelming response, with 90% of the 445 units booked or sold.
“We maintain our forecasts and 44 sen target price at a 75% discount to revalued net asset value (RNAV) to factor in the present weak property market sentiment and its small market cap.
“Reiterate ‘buy’ with catalysts expected from stronger earnings and sales in FY20. Risks to our view include a prolonged slowdown in property sector, ” it said.
Maybank IB Research said with new tenants – Samanea Malaysia, a subsidiary of Singapore-based Samanea Group, and Jaya Grocer – starting to pay rent after their rent-free period ended, it expected operating losses from Glo Damansara shopping mall to narrow in FY20.
Leasing was 74% as at end-July 2019, up from 45% in 2018. Samanea Malaysia occupies 180,000 sq ft or 100 shop units. It has rented out 50% of its shoplots to home-related retailers.
There was also an overwhelming response to the recent launch of Tower A of Glomac’s 121 project. Residences worth RM321mil in gross development value (GDV) was 90% booked or sold in a weekend. Its 445 apartments, with a similar concept as Plaza Kelana Jaya 4, were priced from RM325,000 per unit for 450 sq ft and RM540,000 per unit for 750 sq ft or RM720 per sq ft gross.
The brokerage attributed the project’s success to its proximity to nearby Bandar Utama MRT station, One Utama Shopping Mall and the upcoming Kayu Ara station under KVLRT 3.
“With the success of Tower A, Glomac intends to launch the remaining 389 units at Tower B by end-September or early October 2019.
“We keep our forecasts and RM1.76 per share RNAV estimate for now. Management has a RM600mil (+86% year-on-year) sales target for FY20 versus our RM548mil forecast.
“This is premised on RM900mil worth of new projects, including Lakeside Residences’ Green Tec Central with its affordable apartments at RM269mil in GDV when launched by fourth quarter of FY20 and the 121 Residences, ” it said.
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