UEM Land roped in Ascendas Group, which specializes in developing and managing business and industrial space (flagships include Singapore Science Park, International Tech Park, Bangalore(India), Dalian Ascendas IT Park(China) and Carmelray Industrial Park II, Laguna (Philippines) to develop a RM3.7bn integrated technology park in Nusajaya, Johor. The proposed development is sitting on 519-acre land, which will be divided into three phases, with combined GDV of RM3.7bn. UEM Land will hold 40% of the JV, with the remaining held by Ascendas. We understand that UEM Land might potentially derived RM270m in land sale gain apart from the JV development profit which spans about 9 years. We maintain our earnings estimates pending more clarifications.

• Gerbang Nusajaya, RM18bn GDV. Gerbang Nusajaya (previously known as Nusajaya West) is a 4,500-acre integrated development located near the second link and CIQP (customs and immigration office) in JB. Apart from the industrial park, other activity-based retail such as AutoCity test track and Asian Trade Centre – China Mall will be built to leverage on the abundance of cheap land in Nusajaya. We believe UEM Land has brought in a good partner which has proven track record in developing business parks in this region to push the vast project to move faster, riding on Ascendas‟ expertise, especially to bring in big names into the technology park. Positively, the take-off of the technology park will further boost residential/mixed development sales, which traditionally command better margins for the Group.
• Maintain Outperform and TP of RM2.80 (10% discount to RM3.10 RNAV). Potential catalyst include 1) larger role in M+S Pte Ltd‟s SGD11bn Marina South in Singapore 2) meeting its sales target 3) participation in land privatization.

Source: PublicInvest Research - 24 Oct 2012