PETALING JAYA: UEM Sunrise Bhd
’s move into industrial park development through its RM4bil Gerbang Nusajaya project could unlock greater value from its Johor landbank.
This is as the group shifts from selling land parcels to participating in the entire development cycle and potentially retaining industrial properties for leasing income. RHB Research said the deal marked the group’s first industrial development at Gerbang Nusajaya.
“Unlike in the past where UEM Sunrise only sold land parcels, the company will now get involved in the entire development cycle by partnering with a reputable industrial developer, riding on the upside potential of the land.
“Besides this, UEM Sunrise, via the joint venture (JV) company, could potentially retain some built-to-lease industrial properties for future monetisation opportunities. The project, which is worth RM4bil in gross development value (GDV), is slated for launch in late 2027,” the research house said in a report yesterday.
UEM Sunrise entered into a 50:50 JV with AME Elite Consortium Bhd through Gerbang Synergy to develop an integrated managed industrial park in Gerbang Nusajaya, Iskandar Puteri. UEM Sunrise will dispose of 402.1 acres of freehold land to the JV for RM972.1mil (or RM55.50 per sq ft).
The capital commitment from UEM Sunrise is 50% of the total, which is RM226.6mil. The shareholder loans will fund the first 46% of the land consideration, with the remaining 54%, amounting to RM524.9mil, intended to be funded through the JV’s external facilities. Both partners are required to cover any financing shortfall equally.
RHB Research said it is positive on UEM Sunrise’s JV with AME Elite, as the latter is a reputable industrial park developer that will significantly enhance the growth prospects and profile of the entire masterplan for Gerbang Nusajaya.
The research house also noted that previously, UEM Sunrise had sold a parcel of 170-acre land at the Southern Industrial and Logistics Clusters to AME Elite in 2020.
“We believe the JV structure is good as UEM Sunrise will be able to tap on AME Elite’s established track record in industrial park development and management as well as a strong network of multinational customers.
“AME Elite’s i-Park series is recognised as a world-class and award-winning managed industrial park, which should set a benchmark for subsequent developments of other industrial components in Gerbang Nusajaya – enhancing the overall value in the area,” RHB Research said.
RHB Research said UEM Sunrise will receive payments from AME Elite on a staggered basis according to its progress of the master infrastructure on the land (around 70% payments will be concentrated in 2027).
As such, the estimated net disposal gain of RM47.4mil (representing UEM Sunrise’s portion) will be recognised progressively, according to the payment schedule.
The research house said while the disposal gain (total: RM94mil) may seem low, it highlighted the net book value of RM847.2mil for the land is inclusive of water and land-related master infrastructure costs (some to be incurred).
That said, RHB Research reduced its target price for UEM Sunrise to reflect the prevailing market headwinds as well as concerns over the current local political landscape. It maintained its “buy” call on UEM Sunrise with a lower target price of 77 sen from 86 sen.
Meanwhile, Hong Leong Investment Bank (HLIB) Research said it viewed the partnership positively as AME Elite’s industrial expertise and extensive clientele should lower execution risk, while freeing up UEM Sunrise’s resources to activate more of its Johor landbank.
“The transaction is expected to generate a net disposal gain of RM47.4mil and reduce pro forma net gearing from 0.37 times to 0.3 times,” the research house said.
However, HLIB Research lowered its financial year 2027 (FY27)/FY28 earnings forecasts by 2.2%/3.5% to reflect the anticipated delay and lower attributable contribution under the JV.
It maintained its “buy” call on UEM Sunrise with an unchanged target price of 92 sen, based on a 60% discount to revalued net asset value of RM2.30.
