Monday, June 16, 2014

TamBun Indah - Largest Listed Land Owner In Penang

The acquisition of 209.5 acres in Simpang Ampat in Seberang Perai will turn TamBun Indah into the largest landowner in Penang, boosting its profile as a major property player up north while addressing its depleting landbank.

The land purchase is a catalyst for Tambun Indah’s shares.

The land acquisition will boost Tambun Indah’s landbank by an estimated 40%. As a good proxy for Penang, the company will continue to capture the investment spillover from Batu Kawan where many high profile projects are taking shape.

The company will become largest listed land owner in Penang, overtaking GOB (with 350 acres), Malton (300 acres) and potentially Eco World (300 to 400 acres).

The price it pays for the land – about rm16 psf – is relatively lower than that in other transactions in Seberang Perai of between rm40 and rm55 psf.

This will enable the company to maintain its 30% to 35% development margin.

Nevertheless, its share price have nearly tripled in value in the past 18 months to June 2014.

The development of the 209 acres will only begin in late 2020. This is because Tambun Indah still has 385 acres of undeveloped land in Pearl City. Thus the new land will not contribute to the developer’s bottom line until then.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.