AME Elite positioned for growth in Johor

PETALING JAYA: Unlike in previous upcycles in Iskandar Malaysia, the slew of land transactions this time round mainly involves industrial properties – a sector that brings in investments with a multiplier effects for the construction and services industries.

The recent transacted industrial land prices of RM120-RM125 per sq ft indicates that there is an attractive upside to industrial property developer AME Elite Consortium Bhd’s remaining gross development value (GDV) for its industrial projects in Iskandar Malaysia, said RHB Research.

The transacted prices also imply that the demand for industrial land remains robust and that the influx of investments is supporting a revised net asset value (RNAV) re-rating, particularly for developers that own strategic land bank.

AME has a remaining land bank of about 160 acres in i-TechValley.

RHB Research understands that the land is now being marketed at RM80 to RM85 per sq ft to the company’s recent clients.

Given the new transacted price at the Nusa Cemerlang Industrial Park (NCIP), the research house sees a potential upside of at least 10% to AME Elite’s remaining GDV of RM1.17bil for i-TechValley.

At land prices of RM88 to RM93 per sq ft, this is still at a 22% discount to the prices at NCIP.

The potential addition of new land, especially in Johor, could be a share-price catalyst as AME Elite has been anchoring the industrial sector in Iskandar Malaysia.

The research house raised AME Elite’s estimated GDV for all its industrial projects in Johor by 10%-12% on average, to reflect the updated market price for industrial land.