There is a high chance that the construction arm of the Malaysian Resources Corporation Bhd (MRCB) , know for various outstanding developments like Sentral Suites KL Sentral, would be appointed to take part in the multi-billion-ringgit Bandar Malaysia development, reported The Star, citing RHB Research Institute.
According to the research house, MRCB is well-positioned to participate in the upcoming transport hub due to its excellent track record and experience in building similar projects. The company had also inked a memorandum of understanding (MOU) with Wondrous Vista Development Sdn Bhd and the land owner, Bandar Malaysia Sdn Bhd.
Consequently, RHB Research is bullish on MRCB’s outlook. In fact, it retained its buy call for the company and increased the target share price from RM1.62 to RM1.90 apiece.
“MRCB is a potential election play. The stock is one of our top picks in the property sector,” it said, adding that the firm’s construction orderbook are predicted to increase sharply if it does get hired for Bandar Malaysia.
Moreover, the authorities had decided to include Bandar Malaysia in the Kuala Lumpur Internet City (KLIC), a digital free trade zone. This means they might expedite the negotiations for the future transport hub.
Of Bandar Malaysia’s total area of 486 acres, 60 acres have been set aside for the construction of an integrated transport terminal. “Apart from building the terminal, we believe the consortium would also develop some other commercial components on the site, similar to the KL Sentral concept,” noted RHB Research.
“The potential gross development value (GDV) for this 60 acres could be bigger than the RM14 billion KL Sentral, which occupies 72 acres of land, given that the latter started its development in early 2000 when property prices were still low.”
Aside from Bandar Malaysia, which is the terminus for the Malaysian end of the Singapore-Kuala Lumpur High Speed Rail (HSR), MRCB is also targeting construction jobs in the other five HSR stations in the country, and possibly some sub-contracts for the track works. As for the HSR itself, it is expected to be built by foreign parties.
RHB Research estimates that the HSR could cost RM60 billion to build, with the tender expected to be called in late 2017/2018.
Furthermore, it believes that MRCB is actively bidding for other infrastructure projects and construction contracts under the 1Malaysia Housing Programme (PR1MA).
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Image sourced from The Star
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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