Analysts are optimistic about the latest land purchases made by Mah Sing Group Berhad for a total of RM85.9 million (or RM240 per sq ft) in Puchong Perdana, Selangor.
Mah Sing is buying two parcels of land measuring 8.2 acres from Millennium Acres Sdn Bhd, which is 50 per cent-controlled by Tanco Holdings Bhd managing director Datuk Seri Andrew Tan Jun Suan.
Supreme Springs Sdn Bhd, a wholly-owned subsidiary of Mah Sing, will purchase the first parcel, consisting of 3.8 acres, for RM40.19 million, while Legend Grand Development Sdn Bhd, another subsidiary, will purchase the second parcel, consisting of 4.4 acres, for RM45.67 million.
Mah Sing stated last week in a stock exchange filing that the transaction is anticipated to be completed in the second half of this year (2HCY23).
The land parcels have a gross development value (GDV) of roughly RM726 million, according to Mah Sing.
One of the properties will become a residential project, and the other will become a mixed-use development, according to the plan by Mah Sing. MIDF Research said the two projects with a combined GDV of about RM726 million translates into an attractive land cost to GDV ratio of 11.8 per cent.
The land purchase is seen favourably by the research firm because it supports Mah Sing's quick turnaround strategy and enables the company to extend its M-Series of affordable housing projects in the Klang Valley. The two upcoming developments, M Terra and M Hana, are intended to be brand-new additions to the M Series of reasonably priced projects.
The projects are reasonably priced, with an indicative selling price of RM250,000 and built-ups of 552 square feet, 769 square feet, and 1,005 square feet, respectively.
TA Securities is optimistic about the land deal given its strategic location and reasonable acquisition price (land cost to GDV ratio of 12 per cent).
"The two parcels of land, which are adjacent to each other, are surrounded by matured neighbourhoods that provide a large catchment of potential buyers. These are transit environment district (TED) developments as they are located 501 meters to 1,000 meters from public transportation, with LRT Puchong Perdana and LRT Puchong Prima stations being the closest. The land is also surrounded by educational institutions, medical centers and shopping malls," it said.
Hong Leong Investment Bank is positive on this development due to the swift time to market the projects as the tentative launch date will be in 2HCY23.
It is also upbeat as the indicative selling price of M Terra is in the affordable range of below RM500,000.
"Given the affordable price range and strategic location in proximity to train stations, the project should be able to enjoy good demand. We view the company's strategy to launch its affordable M-series in the Klang Valley region positively as products in this price range should continue to do well given the growing middle class in the region," it said.