Brem undervalued, looking for more land with associate sale proceeds: MD

by **Cals** Wed 01 Oct 2014, 07:51

Business & Markets 2014

Written by Kamarul Anwar of theedgemalaysia.com

Tuesday, 30 September 2014 13:16

KUALA LUMPUR (Sept 30): Brem Holding Bhd is deemed undervalued after taking into account the property developer's land bank, which is held at acquisition cost, according to Managing Director Datuk Khoo Chai Kaa.

Khoo said Brem had more than 200ha (500 acres) of land bank, most of which were bought many years ago, thus making its land holding cost low and margins from development attractive.

"I don't think the net tangible asset (of RM2.91 per share) is the real value of Brem. We hold our land at the acquisition costs and we bought all those land years and years ago," Khoo told reporters, after Brem's annual general meeting today.

Brem shares settled flat at RM2.49 at 12.30pm, for a market capitalisation of RM419 million.

Most of Brem's landholding is within the Segambut enclave here, which is a stone's throw from the urban Mont Kiara township.

This December, Khoo said Brem would launch a new development called Kiara Harmoni 1, which would have a gross development value (GDV) of about RM450 million.

Brem's annual GDV ranges from RM300 million to RM500 million, according to Khoo. However, he said with the construction player-cum-property developer's land bank becoming larger, it would eventually take on bigger development size in the years ahead.

Land bank expansion is on the cards. Khoo said Brem was looking to buy more land, using proceeds of RM80.24 million from the sale of its associate Bertam Alliance Bhd in late July.

Khoo said Brem would eventually increase the development rate of its undervalued land bank.

"However, looking at the land cost now, I think they are really expensive. So, we have to be prudent in looking for land with good potential," Khoo said.

Nonetheless, Khoo, who indicated that his philosophy for finding land was "location, location, location", said he was looking for land in the Klang Valley.

He however, did not discount the possibility of buying land outside of Kuala Lumpur or overseas.

"Now, we have a lot of cash (after selling off Bertam shares). We are constantly on the lookout for any opportunity. When it comes, we strike," he said.

In July, Brem cashed out on its investment in Bertam by selling its entire 68 million or 32.89% shareholding in the latter to Wisma Jutamas Sdn Bhd for RM80.24 million cash or RM1.18 per share.