PETALING JAYA: Engineering and construction group Gamuda Bhd
’s acquisition of a land parcel in Singapore worth S$1.01bil or about RM3.31bil, together with joint-venture partners, is deemed positive and a timely addition to the group’s Singapore portfolio, analysts say.
Gamuda, via its wholly owned subsidiary Gamuda (Singapore) Pte Ltd and joint-venture partners Evia MCS Pte Ltd and H108 Pte Ltd, has secured the 29,450 square metre Chencharu Close leasehold site from Singapore’s Housing Development Board.
The site has been earmarked for 875 private condominium units and 135,625sq ft of commercial space, with an estimated gross development value (GDV) of about RM6.9bil.
TA Research said the land deal will position Gamuda as a first-mover in developing government land with a private-housing component in the Chencharu area.
This gives the group a strategic edge in shaping the initial development narrative of the area, which has seen limited new supply since the launch of The Estuary development in 2010.
Crucially, this success strengthens Gamuda’s track record in Singapore’s highly competitive government land sales market, which could enhance its prospects of securing future tenders involving similar integrated developments.
“Based on the tender results, the consortium’s winning bid was about 20% above the second-highest offer. While this may appear aggressive, the implied land cost-to-GDV ratio of about 55% still falls within the typical 50% to 60% range observed in Singapore government land tenders.
“In our view, this suggests that Gamuda is confident of achieving higher average selling prices, supported by the site’s strong locational attributes, such as proximity to Khatib MRT station and reputable schools, and its first-mover position in Chencharu,” the research house said.
With the new development in Chencharu, this translates to a 6% increase of Gamuda’s total remaining GDV, according to Hong Leong Investment Bank Research (HLIB Research) .
The research house expects an outsized impact on earnings, given that 75% of Gamuda’s remaining GDV represents sizeable township projects with longer development periods.
In contrast, the Chencharu Close Project is a quick-turnaround project to be launched in November 2026, lifting earnings from 2027 onwards.
“To this end, we anticipate a construction period of about four years. Assuming a typical low to mid-teens net margin assumption, the project could generate cumulative profit of between RM380mil and RM520mil for Gamuda.
“We lift our 2027 core net profit forecasts by 3.2% after including the project into our numbers,” HLIB Research said.
The research house maintained its “buy” rating on Gamuda , with an unchanged target price of RM6.88 per share.
Meanwhile, Kenanga Research said the Chencharu land acquisition replenishes Gamuda’s property pipeline in Singapore following the completion of the executive condominium project OLA there, last year.
“While its gearing is set to rise, healthy margins, strong demand, and a quality product profile should offset concerns.”
The research house maintained 2026 to 2027 assumptions for new job wins of RM22bil and RM27bil, respectively, and property sales assumptions of RM4.9bil and RM5bil, respectively.
“We continue to like Gamuda for being in the driver’s seat for the Mutiara Line of the Penang Light Rail Transit project, its ability to secure new jobs in overseas markets, its strong earnings visibility underpinned by a record order book of RM38.4bil, and its inroads into the renewable-energy space.”
Kenanga Research has an “outperform” call on Gamuda, with a slightly higher target price of RM6.13.
