KUALA LUMPUR (Sept 18): Property developers with developments or landbanks located around the area of upcoming financial hub Tun Razak Exchange (TRX) will stand to benefit from the mega project by 1Malaysia Development Bhd (1MDB).
UOB KayHian, in a research note, maintains its "marketweight" call on the property sector after meeting with the management of 1MDB to discuss the TRX development, a project expected to generate a gross development value (GDV) of RM26 billion in the next 15 to 20 years.
"Other than being located in a prime area, the development (TRX) will also feature a dedicated MRT station, and an existing and upcoming network of public transportation systems," said Jonathan Lai, analyst at UOB KayHian.
"In our opinion, the potential winner is WCT, who can leverage on its expertise and track record from previous jobs in Iskandar, while KLIA and Vale to stand a better chance in securing the earthwork packages. Other potential winners are IJM Corp and Mudajay, we believe."
"These will greatly benefit developers who have developments or landbanks around the area, which include Sunway and Boustead," Lai added.
According to Lai, ground clearing works have already commenced and physical construction of the first phase is expect to kick off by mid-2013 with an estimated GDV of RM5 billion to RM6 billion.
"We understand there are about three packages comprising earthwork, basement and civil works in phase one. We believe that the earthwork packages could be significant, with packages valued at RM500 million to RM1 billion in total," Lai said.