News Update Outperform
- Glomac announced its proposed acquisition of 18 condo units of Suria Stonor from Dekad Darat and Progressive Berg. The purchase consideration of RM38.4m represents some 35% discount to the last transacted price of RM1,000 psf for comparable properties in the condominium.
- To recap, Dekad Darat and Progressive Berg previously acquired some 30-40 units of Suria Stonor, which was completed two years ago by Glomac. Although the reason for the re-sale was not mentioned, we think it could be due to some financing constraints.
- We are neutral on this latest development. The 18 units will be put into the market again by Glomac and these condo units will be categorised as “Investment” in Balance Sheet upon completion of the acquisition. The deal may signal the extent of speculative buying activities 2-3 years ago during the boom of high-rise residences especially within the KLCC area previously, leading to an oversupply now.
- No change in our forecast. We maintain our Outperform rating, with an unchanged indicative fair value of RM2.09, based on a 15% discount to RNAV.
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