KUALA LUMPUR: Mah Sing Group Bhd's growth prospects look promising after its recent acquisition of 5.2 acres of freehold land along Old Klang Road in Kuala Lumpur, marking its fourth land purchase this year, analysts said.

Mah Sing has acquired the freehold land for RM113 million for the development of M Aurora.

This newly acquired land is earmarked for a transit-orientated development with an estimated gross development value (GDV) of RM660 million.

BIMB Securities Research is optimistic on the deal, fuelled by strong demand for M-Series apartments in the city centre.

"The M Aurora launch will enhance the company's market position, boosting growth and earnings, increasing Mah Sing's remaining GDV to RM26.77 billion and expanding its land bank to 2,392 acres," it said in a note.

Echoing the views, TA Securities Research said the land is strategically located along Old Klang Road, providing excellent access to major highways.

It also said that this land acquisition aligns with Mah Sing's strategy of acquiring prime locations in Greater Kuala Lumpur, Penang, and Johor to expand its M-Series projects.

"Following this acquisition, Mah Sing's landbank will increase to 2,392 acres, with a remaining GDV of RM26.8 billion.

"In terms of funding, Mah Sing's robust balance sheet with a net gearing of 0.1 times and a cash balance of RM912 million as of June 2024 positions the company well for more land acquisitions in the future," it said.

Meanwhile, CIMB Securities Research said the project is designed to appeal to working adults, families, as well as those looking to upgrade their homes.

As most of the surrounding developments are older landed units, the firm said M Aurora has a captive target market in buyers from extended families who wish to live near their parents.

"Additionally, it could attract foreign property buyers looking for a KL address under the Malaysia My Second Home (MM2H) programme's Silver category, which requires a minimum purchase price of RM600,000," it said.

Overall, CIMB Securities do not anticipate Mah Sing facing any issues in raising the required funds to acquire this new landbank, as its net gearing remains at a comfortable level of 10 per cent as of June 30, 2024.

"The proposed land acquisition is slated for completion by the first half of 2025 (1H25) and is anticipated to yield operating margins of 17 to 18 per cent.

"Pending final approval from the relevant authorities, we have not included any contributions from M Aurora for the time being," it added.