Friday, 13 December 2013

Pearl City Gets Bigger Again

Tambun Indah has acquired another piece of land within its Pearl City development through wholly-owned subsidiary Novinia. The 20.9-acre land is transacted at RM14 psf or RM12.7mil in total, which is at similar cost to its recent acquisition in the same area in Nov 2013.



Current acquisition is expected to be completed by FY14Q1. Both acquisition are expected to contribute RM240mil to its GDV.

In its press release, Tambun Indah says that both the lands are slated for development of residential properties with commercial facilities & amenities.

As a very small shareholder of the company, I think this is a good move by the management. Though I do hope that Tambun Indah will purchase land in Penang island or Klang Valley and build condos which carry high GDV, it is actually better for it to concentrate on its strength and advantage, which is the Pearl City township.

Other big players have seen the opportunity in Penang mainland, thus Tambun Indah should strengthen its position here. Compared to other property hot spots, Seberang Perai Selatan can give better margin (lower land cost & admin cost) and better sales (more affordable landed properties & less affected by the cooling measures) to Tambun Indah.

The recent lands purchase should not stress Tambun Indah's balance sheet too much, as I expect its cash flow to further improve after acquiring the remaining shares in Palmington & TI Development.

2 comments:

  1. Hi, do you know where is the land purchased?

    ReplyDelete
  2. I don't know the exact location..

    ReplyDelete