MIDF upbeat on IJM Land’s RM1b London project

MIDF upbeat on IJM Land’s RM1b London project
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Monday, 23 September 2013 12:20

KUALA LUMPUR (Sept 23): MIDF Research, positive on IJM Land’s London property project, has maintained its ‘buy’ call on IJM Land’s shares with unchanged target price (TP) of RM3.32.

Last week, the company announced the launch of its upcoming Royal Mint Gardens (RMG) project in London later this week.

In a note today, the research house said it has maintained its ‘buy’ recommendation for IJM Land with unchanged TP based on price earnings ratio of 15.1 times against FY14 earnings per share of 22 sen.

MIDF Research’s analyst Sean Liong said that the project is strategically located at the prime Royal Mint Street, E1 London, adjoining to City of London which is the world’s major international financial district.

“We hold a similar view with media reports stating that IJM Land is expecting take-up rate to hit 70% in the first month after the launching of RMG,” said Liow.

“The estimated gross development value for RMG is £200 million (RM 1.016 billion). It will be launched at the end of this week in Malaysia and London, with expected completion in 4Q17.”

RMG consists of two phases. Phase 1 comprises three residential towers with 254 units of apartments. Phase 2 comprises 236-room five-star hotel, 33 hotel service apartments, and 79 residential apartments.

“Meanwhile, we are also positive on the acquisition of Segambut land which is located at a matured area. The 368 residence service apartments are relatively affordable at 550-600 psf,” said Liow.

But MIDF is not factoring the contribution from this project in its forecast.