PETALING JAYA: UEM Sunrise Bhd
is expected to book a net gain of RM47mil from its recent disposal of 402 acres project land in Johor to Gerbang Synergy Sdn Bhd (GSSB), apart from the group’s other future development profits, according to CIMB Research.
Concurrently, 50% of the RM972.1mil proceeds from the land disposal will help reduce UEM Sunrise’s pro forma net gearing ratio to 30% from 36% for the financial year 2025 (FY25).
GSSB is a 50:50 joint-venture (JV) company between UEM Sunrise and AME Elite Consortium Bhd to develop a RM4bil industrial park in Gerbang Nusajaya, Iskandar Puteri.
As the JV vehicle, GSSB will develop the 402-acre parcel in Iskandar Puteri, which covers the proposed Gerbang Nusajaya Industrial Park in three phases, CIMB Research said in a recent report.
For context, the GSSB land sits within Precinct 2 of UEM Sunrise’s greater Gerbang Nusajaya masterplan in Iskandar Puteri.
Hence, the proposed development combines UEM Sunrise’s master planning expertise with AME Elite’s proven track record in managing industrial parks and expansive clientele.
AME Elite will also serve as the project and marketing manager for the proposed development, while UEM Sunrise will deliver the earthworks and infrastructure works in stages by June 2030.
The sales and purchase agreement (SPA) between UEM Sunrise and AME Elite will become unconditional within 21 months of its execution and is subject to a two-month automatic extension (by September 2028).
The GSSB land is projected to have an indicative gross development value of RM4bil that will be executed over 10 years. The first phase is expected to commence by end-2027.
Following UEM Sunrise’s receipt of a 10% deposit (within 14 months of the SPA), the purchase consideration for the land will be settled in six installments by August 2030.
CIMB Research is mildly positive on the GSSB land development as it helps rebuild UEM Sunrise’s industrial presence in Johor.
Furthermore, UEM Sunrise is fine-tuning the Gerbang Nusajaya master plan to address sustained industrial demand, potentially revising the residential and commercial components at Precinct 2 into industrial components.
“We maintain our earnings estimates pending further updates regarding the GSSB land’s execution timeline,” said CIMB Research.
The brokerage has kept a “buy” call on the stock with an unchanged target price of 83 sen per share.
It also likes UEM Sunrise for its exposure to the real estate market in Johor as well as the stock, which is trading at a steep 63% discount to its book value.
