- It was announced on Bursa that Sime Darby and CapitaMalls
Asia have entered into a conditional agreement to form a 50:50 joint venture to
develop a shopping mall in Taman Melawati, Selangor. Development cost is
estimated at RM500mil and the project is expected to be completed in 2016.
- The mall would be located in the heart of Taman Melawati
and is the last sizeable plot of commercial land within the matured township.
Recall that this township was developed by Negara Properties.
- Judging by the size of the mall – NLA of 635,000sf – it
would be positioned as a regional mall akin to MidValley MegaMall, albeit at a
much smaller size.
- While there is a considerable number of malls within the
vicinity, i.e. Wangsa Walk (223,000sf) and KL Festival City (500,000sf), we
believe the mall would be a success:- (1) The mall is surrounded by matured
neighbourhoods of Taman Melawati, Taman Permata, Kemensah Heights, Wangsa Maju
and to a certain extent, Setapak and Bukit Antarabangsa or a population of
800,000 within a 10-minute drive, (2) CapitaMalls Asia’s strong track record in
managing malls with extensive retail network
- This mall would also provide more value to Sime’s
remaining landbank of about 200acres in Melawati.
- We would not be surprised if Sime decided to sell the mall
to CapitaMalls Asia’s unit, CapitaMalls M’sia Trust (CMMT), once the mall has
stabilised given Sime’s lack of experience in managing retail malls.
- We maintain our BUY rating on Sime with our fair value
unchanged at RM12.30/share, pegging a 10% discount to its SOP value of
RM13.70/share.
- Our BUY rating is premised on robust CPO price this year
with 60%-65% of its earnings coming from the plantation division. Sime is the
most liquid proxy to the plantation sector with a sizeable weighting of about
8% in the FBM KLCI.
Source: AmeSecurities
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