KUALA LUMPUR: The value of its 150 acres earmarked for a data centre (DC) hub in Southville City will be enhanced after Mah Sing Group Bhd secures its 500 megawatts of power allocation, RHB Research said.
Mah Sing officially received the approval from Tenaga Nasional Bhd last week for the allocation of 500MW power supply to the 150-acre DC hub.
As power supply is now deemed to be a "scarce" resource due to the influx of DC investments from global technology players, the land for the DC hub should receive a greater premium.
This is because it well suits DC players looking for a near-term commencement of operations as the application for power supply and construction of the primary metering unit usually take time.
RHB Research said with greater visibility on the DC hub development, it now revalues Mah Sing's 132 acres of remaining land in Southville DC hub.
"Recall that 17.55 acres of commercial land earmarked for Bridge DC was transacted at RM160 per square foot (psf), while the commercial land at the surrounding area is valued at RM200 psf.
"Assuming a gross margin of 50 per cent (for the balance 132-acre DC hub land), the net surplus from our revaluation for the entire Southville will be boosted by 639 per cent," it noted.
The firm said while DC is now a new growth engine, Mah Sing's management continues to stay focused on growing its property development business.
"Mah Sing is likely to acquire more sites that are suitable for its M series projects as well as industrial development. This should provide further upside to our RNAV estimate."
RHB Research kept its "Buy" call on Mah Sing with a new target price of RM2.26 from RM2.00 previously.