PETALING JAYA: The plan to turn Carey Island into an integrated “maritime city” has received the thumbs up from analysts, as it will unlock the value of land there owned by Sime Darby Bhd.
On Monday, Sime Darby inked a memorandum of understanding with MMC Corp Bhd and India-based Adani Ports and Special Economic Zone Ltd (APSEZ) to explore developing an integrated maritime city in Carey Island, Selangor, worth US$22.78bil.
The maritime city will support the proposed development of a new port in Carey Island. Previously, port authorities had unveiled plans to build a massive port and industrial complex in Carey Island that would cost about RM200bil.
RHB Research Institute said that the port and maritime city could spur further development along southern Selangor’s industrial belt.
UOB Kay Hian, which is generally positive on the maritime city plan, however, has maintained its earnings forecast for Sime Darby due to the long gestation period of between 20 and 30 years for the project.
“The property development project is positive to Sime’s long-term earnings. However, it is too early to impute the earnings impact.”
There were no details on the size of the “maritime city”, but Sime owns about 11,000ha in Carey Island, part of that being oil palm plantations.
Sime Darby also has about 55,000 ha of land bank in Negri Sembilan, which is likely to benefit from this project.
“This development would also be a strategic fit for the Vision Valley Development project to be spearheaded by Sime Darby Property,” RHB said.
Vision Valley is a project led by Sime Darby covering up to 108,000 ha, sprawling from Nilai to Port Dickson in Negri Sembilan. Sime Darby owns about 40% of the land.
KAF-Seagroatt & Campbell Securities expects the feasibility study for the maritime city to take at least a couple of years.
“While the feasibility study of the development is still at the preliminary stage and details remain sketchy, we are of the view that Sime Darby would emerge as the main beneficiary if the new port development materialises, given its vast landbank in Carey Island,” Hong Leong Investment Bank Research said.
APSEZ, which is one of India’s biggest private port operators, is a unit of the conglomerate Adani Group.
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