Sunway’s Singapore job win an earnings booster

Kenanga Research said the incremental value to its revalued net asset value estimate was minimal, but it remained upbeat on Sunway’s successful bid for another development project in Singapore.(File pic shows Sunway's iconic lion at Sunway Pyramid)

PETALING JAYA: The recent win by Sunway Bhd for the redevelopment of Flynn Park in Singapore ensures its continued presence in the Singapore property market.

It will further enhance the earnings visibility of Sunway’s property developments in Singapore, said analysts.

Following the deal, its Singapore based projects now consist of 47% of the group’s remaining gross development value (GDV) for international projects, which account for 9% of the group’s total development value of RM54bil, said AmInvestment Research.

Kenanga Research said the incremental value to its revalued net asset value estimate was minimal, but it remained upbeat on Sunway’s successful bid for another development project in Singapore.

It said Sunway’s recent projects on the island nation have been well-received and with the location of Flynn, it believes demand for its units should be encouraging.

Sunway (which has 30% in the joint venture) and its partner Hoi Hup Realty won a bid for the en bloc acquisition of Flynn Park – a condominium development along Yew Siang Road, Pasir Panjang in Singapore – at a price of S$371mil (RM1.15bil). It covers 4.79 acres of freehold elevated land, with an allowable gross plot ratio of 1.4, the research house said.

MIDF Research expects that the funding requirement of RM345mil (30% stake) for the en bloc acquisition will have a marginal impact on Sunway since it had a cash pile of RM1.5bil as at the second quarter of financial year 2021.

Meanwhile, UOB Kay Hian said based on the most recent transactions in Pasir Panjang in 2017, the purchase price of S$371mil (RM1.15bil) was slightly higher in terms of cost per sq feet and cost-to-GDV.

MIDF said the indicative GDV of the proposed redevelopment was S$750mil (RM2.3bil). Sunway’s Singapore projects recorded encouraging new sales of about RM1bil in the first half of 2021, which made up more than half of its total new sales of RM1.64bil during the period, MIDF said.