YTL Land & Development

Maintain Buy

Current Price: RM2.06 KLCI : 1,373.14

Price Target : RM 3.30

d7, unleashed

Story: YTL Land has just released the advertising ‘teasers’ for d7, its first commercial development in Sentul East. A check with the sales office indicated that soft launch is pricing targeted in mid-July with estimated GDV of RM80m.

Point: We have indicated in our initiation report that commercial element is important to add vibrancy to YTL’ Sentul development. We believe d7, the maiden commercial development in Sentul, signals YTL stepping on the gas to expedite its projects in anticipating increase in demand from the pro-investment measures by the government.

Relevance: We reiterate our Buy recommendation, with a RNAV-based TP of RM3.30. YTL’s focus on high-end properties will benefit from recent positive measures by the government. We believe the stage is set for YTL to leverage on and be more aggressive on project launches, especially its Sentul projects.

d7 consists of freehold retail, duplex offices and F&B space and is located in Sentul East, near The Tamarind and The Saffron. YTL is keeping its retail space which we think is important to have control of the tenant mix. The indicative selling price for its office space with built-up ranging from 850sf- 1500sf is RM400 psf which is spot on with our assumption in the RNAV estimate.

The design of d7 emphasises flexibility that meets current and future needs with the bridged units. The design is said to be ‘ahead of its time’ and from the artist’s impressions, we do believe the concept will be well received as it gives flexibility to space with the connecting bridges and duplex offices. There’s elevator access for every floor with 24-hour building security and wireless broadband throughout the development.

d7, with estimated GDV of RM80m might be perceived as a small project by the company, but we believe the impact is significant for the Sentul community. The introduction of duplex offices, retail and F&B would bring more traffic and life into the development. We believe that with YTL’ s support from its parent company YTL Corp, we will not be surprised to see YTL replicate its hugely successful StarHill Gallery elements in d7 and its upcoming commercial projects.

YTL’s Sentul development has all the ingredients to be transformed into one of the sought-after addresses in KL. YTL has completed a 35-acre park in Sentul West, improved accessibility to within 15 minutes drive from Mont’ Kiara and KLCC, the KL Performing Arts Center and a Koi Pond center. With the new F&B and retail elements, we expect the development will receive strong  interest, especially from foreigners.