Genting Malaysia Buys 152 Hectares of Land in Sentul for Rp2 Trillion

Genting Malaysia Borong 152 Hektar Tanah di Sentul Seharga Rp2 Triliun

Genting Malaysia Acquires 152 Hectares of Land in Sentul for Rp2 Trillion

Dream - Genting Plantations Bhd (GENP), one of the businesses owned by Genting Group, plans to acquire two land plots totaling 152 hectares (ha) owned by PT. Sentul City Tbk (BKSL) in the Sentul area, Bogor, West Java. The land acquisition by Genting Plantations Bhd (KL:GENP) recently conducted in Bogor will increase its estimated net debt by the end of fiscal year 2025 to Rp4.27 trillion (22% net gearing) to Rp5.47 trillion (29% net gearing), which is still manageable.

According to The Edge Malaysia, Kenanga Research stated in a report that they have reduced their revenue forecast for FY2025 (FY2025F) by 3% to account for higher financial costs, Monday, 22 July 2024. They also noted that the property sales from Sentul City are unlikely to be realized within their projected period.

The research company has maintained a target price (TP) of Rp2.7 million for the stock, based on a price-to-book value (PBV) ratio of 1.0 times, "in line with the PBV ratio of the plantation sector which ranges from one to two times". It should be noted that GENP is currently acquiring 355 hectares of land with Building Use Rights (with a validity period from 2028-2053, with a 20-year + 30-year extension) in Sentul City, Bogor. Bogor was chosen because it is considered a city close to Jakarta - priced at Rp2.052 billion (RM593 million).

"Sentul City is not unfamiliar to GENP. Three years ago, GENP paid Rp439 billion or Rp19.95 billion per hectare for a nine-hectare commercial zone land in Sentul City," said Kenanga as quoted by Dream from The Edge Malaysia, Tuesday, July 23, 2024. "With an average price of Rp5.47 billion or RM1.58 million per hectare, we believe GENP paid a fair price," he added."

Quick examination of property portal based in Indonesia shows that the asking price for larger land (eight to 18 hectares) in Sentul City, Bogor, ranges from Rp 4.1 billion to Rp 10.1 billion per hectare. According to the research company, GENP will also pay around Rp 853 billion out of a total consideration of Rp 3.463 billion, gradually over five years.

Genting Malaysia Buys 152 Hectares of Land in Sentul for Rp2 Trillion

The following is the translation of the given 'Bahasa' text to 'English' while preserving any html tags: "Kenanga's report notes that there are unavoidable risks that need to be considered. These risks include the Western attitude towards palm oil regarding biodiversity issues, the impact of weather and labor shortages on production, as well as the perceived weakness of crude palm oil (CPO) and palm kernel (PK) prices."

"We believe that Jakarta can become two to three types of premium shopping centers. Including Central Jakarta and five other cities — Bogor, Depok, Tangerang, Bekasi (and expanding to include Puncak and parts of Cianjur Regency), Jakarta Raya is also known as 'Jabodetabekpunjur' (combining the first two or three letters of the six cities)."

The word Kenanga.

Jakarta Raya covers an area of 6,800 km², inhabited by 33 million people, and produces an annual Gross Domestic Product (GDP) of Rp6,488 trillion to Rp7.3 trillion. For comparison, Malaysia and Singapore's annual GDP are Rp6.5 trillion and Rp8.1 trillion respectively.

According to news from New Straits Times, this land acquisition is done to support property development in accordance with the company's expansion plans in Indonesia. Meanwhile, based on information from the Bernama website, PT Genting Properti Abadi will purchase 80 hectares of land in Sentul City for Rp1.78 trillion, while PT Genting Properti Jaya will purchase 72 hectares of land for Rp287 million.

Gaji PNS

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