Mah Sing Group Bhd's M Vertica development in Cheras, Kuala Lumpur, which Malaysians have dubbed "little Hong Kong" due to the high density of the project has people worried about the anticipated traffic congestion.

The mixed-use development is spread out across 11.25 acres of leasehold land along Jalan Cheras and is surrounded by established neighbourhoods.

However, buyers are also concerned about the project's overall unit count, which exacerbates the problems.

With five towers and 3,684 units totaling between 850 and 1,000 square feet, M Vertica is the largest residential development in the area.

There are 808 units in Tower A, 685 in Tower B, 752 in Tower C, 793 in Tower D, and 646 in Tower E. The selling price starts at RM480,800.

M Vertica carries an estimated gross development value (GDV) of RM2.2 billion and includes 74 units of two-storey retail shops.

AmInvestment Bank is optimistic about the development, following its recent visit to the location.

The firm said that despite the negative perception of the project's high density, M Vertica appears to be well received by home buyers given its prime location, which is only 3km away from the financial hub, Tun Razak Exchange, and 5km from the Kuala Lumpur Golden Triangle Zone and Bukit Bintang area.

It said the average selling price per square foot (psf) for M Vertica ranges from RM530 to RM571 psf, which is considered attractive as compared to surrounding new projects, such as Nexus @ Taman Pertama (RM650 psf) and Sunway Velocity 2 (above RM800 psf).

"Given the affordable pricing structure coupled with a wide variety of facilities, we believe that M Vertica appeals to younger buyers, particularly first-time home-owners who wish to seek convenience as well as prefer a lifestyle that comes with living in the heart of Kuala Lumpur," the firm said.

It said this is evidenced by the project's overall strong average take-up rate of 83 per cent currently.

Towers A, B, and C, which were launched between February and November 2018, presently have take-up rates of 97 per cent, 96 per cent, and 82 per cent, respectively, according to the firm.

Tower D, which debuted in October 2019, has a 77 per cent take-up rate, while tower E, which was launched in July 2021, has a 57 per cent take-up rate.

M Vertica delivered vacant possession for towers A and B in June 2022.

The firm said the construction of towers C, D, and E are expected to be completed in the first quarter of Mah Sing's fiscal year 2023 (1Q FY23).

AmInvestment Bank believes that M Vertica is strategically located.

The project is located 500m from the Maluri Light Rail Transit (LRT) and Mass Rapid Transit (MRT) Interchange, and 800 metres from the Taman Pertama MRT Station.

AmInvestment Bank pointed out that the construction of a covered walkway to the Maluri MRT is slated to be completed by 1Q FY23.

Further, Mah Sing will carry out upgrading works in Jalan Cheras and Jalan Ikan Ayu, including widening existing roads and building a direct ramp from Jalan Cheras to M Vertica's car park to improve traffic flow, it said.

M Vertica is accessible via major roads such as Jalan Cheras, Jalan Loke Yew, Jalan Pudu, Jalan Tun Razak, the KL-Seremban Highway, and the SMART tunnel, the firm said.

AmInvestment Bank said adding to the appeal is a few reputable international schools located within a 5-km radius from M Vertica, coupled with local schools nearby.

The project is also only 1km from shopping malls such as AEON Taman Maluri and Sunway Velocity.

Mah Sing is rated "BUY" by AmInvestment Bank with a constant SOP-based fair value of RM0.86 per share, reflecting a neutral three-star ESG assessment.

"Our earnings forecast and sales take-up assumptions are also maintained following our visit to M Vertica," it said.

The firm thinks that Mah Sing's outlook is still favourable over the medium to long term because of its astute execution and quick turnaround business model, as well as its efforts in digital marketing and its strength in providing affordable properties in strategic locations.