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KUALA LUMPUR: SUNWAY Bhd’s plans to accelerate investment in Sunway City Iskandar Puteri (SCIP) township mark a significant step in its expansion strategy, as it positions itself to capitalise on the growth of the Johor-Singapore Special Economic Zone (JS-SEZ).

CGS International chartered financial analyst Chong Tjen San said it is timely for Sunway to accelerate investment in the 716-hectare township located in Iskandar Puteri, which is designated as one of the flagship zones for the SEZ.

Over the past 10 years, he said Sunway has invested a total of RM2.5 billion, comprising RM1.5 billion in property launches and RM1 billion in property investment.

Looking ahead, Chong said the company is set to invest more in the next five years, focusing on three key pillars.

He said Sunway plans to establish a free commercial zone with its joint venture with Equalbase, where Phase 1, which comprises 2.2 million square feet of logistics warehouse space, is expected to be completed by the first quarter of 2026.

The company is also developing Sunway Puteri Hills, which is earmarked as a food and beverage hub.

Lastly, it is working on the Banjaran Mangrove Resort, similar to Ipoh’s eco-resort.

It also plans to expand the Big Box Retail Park, doubling net lettable area (NLA) to one million square feet.

“We expect Sunway to plan more launches in phases for SCIP, with population and footfall likely to grow, supporting demand for future launches.

“We believe there is some pent-up demand in Iskandar, as Sunway Aviana (Phases 1-3) was fully sold while Sunway Maple Residence, its first freehold development in Pendas, achieved a 74 per cent take-up as of December 2024,” Chong said.

He added that the latest launch of 44 units at Sunway Maple Residence saw a price increase to RM1.4 million compared to the previous RM1.2 million.

Meanwhile, the recently launched 504-unit Novo Place executive condo in Singapore achieved 88 per cent take-up, sold at S$1,654 per square foot since its launch in November 2024, allowing Sunway to hit its RM2.6 billion presales target for financial year 2024.

Another positive development is the Sunway Medical Centre Damansara (SMCD), which was opened on Dec 2 last year.

For the first two weeks since the hospital opened, Chong said the private hospital achieved 3.2 surgeries a day and a daily census of 150.

He added that the hospital’s operator, Sunway Healthcare Group (SHG), will also be accelerating the development of Sunway Medical Centre Iskandar (SMCI), where it plans to apply for the hospital licence by the first quarter of this year, with possible completion in 2029, a year earlier than the initial plan.

Chong said SHG has commenced the initial public offerings (IPO) process and we believe it is slated for the fourth quarter of this year but could be delayed to the first half of 2026.

“We believe Sunway is well positioned to counter the effects of the implementation of the diagnosis-related group (DRG) system proposal, which is based on fixed payment versus conventional fees for services.

“According to Sunway, it invested in state-of-the-art equipment in order to allow its doctors to tackle higher complexity of cases, hence lifting its hospitals’ reputation, despite also resulting in increased average fees for patients,” he added.

CGS International kept its “add” call on Sunway with a target price of RM5.70 a share.

 

Source: New Straits Times, January 19, 2025

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