PETALING JAYA: Suria Capital Holdings Bhd
’s plan to develop an international cruise terminal at Kota Kinabalu Port is well positioned to capitalise on the Kota Kinabalu waterfront area, which is envisioned to be a major transportation and tourist hub.
AmInvestment Bank Research (AmInvest Research) said in a research note that the Sabah ports operator would also benefit from the significant large developments taking place in the vicinity.
Suria Capital, which enjoys a port monopoly in Sabah, operates all eight major international seaports in the state.
“(The waterfront area) is also supported by the resurgence in tourist visits after the Covid-19 pandemic,” AmInvest Research said in its note.
Suria Capital has entered into two joint-venture-cum-shareholders’ agreements with Exsim Development’s 75%-owned BEDI Development to undertake the development of two parcels of prime land encompassing 35.2 acres within Kota Kinabalu Port.
In the 50:50 joint-venture (JV), Suria and Exsim plan to progressively develop an integrated mixed-commercial project with a massive net development value of RM4.2bil in Jesselton Waterfront, Kota Kinabalu, Sabah.
The project will kick off with the development of the first parcel of land which covers the ex-container yard of Kota Kinabalu Port that was originally designated for One Jesselton Waterfront, and is now provisionally known as Jesselton Docklands.
Originally, Suria Capital was supposed to develop One Jesselton Waterfront under a now aborted JV with Gabungan AQRS Suria.
Both parties terminated the JV in September 2021 due to uncertain post-Covid-19 market conditions.
Suria intends to develop an international cruise terminal supplemented with commercial facilities to serve as a home port or regular port of call for regional and international cruise liners in Kota Kinabalu Port.
The research house has maintained its “buy” call on Suria Capital, but raised its fair value to RM2.55 per share from RM2.27.
The fair value was revised upwards due to the lowering of Suria Capital’s weighted average cost of capital to 7.5% from 8%, given the possibility of a port handling tariff hike this year.
