KUALA LUMPUR, Oct 3 — Sunway Bhd shares on Bursa Malaysia went up in the early session today after it announced plans to buy a 7.11-hectare (ha) prime land in Cheras for RM320 million, earmarking it for mixed-use development.

At 10.01 am, the counter rose 1.0 sen to RM4.14 with 347,500 shares changing hands.

Sunway said in a statement that the sales and purchase agreement for the land acquisition was entered via its wholly-owned subsidiary, Sunway Melawati Sdn Bhd, with Viva Impian Sdn Bhd (VISB).

"The parcel is earmarked for a mixed-use development, with an estimated gross development value of RM3.2 billion. The proposed development will feature opulent serviced apartments, offering a unique urban living experience alongside a vibrant wellness-focused retail podium that includes health and wellness clinics,” it said.

Hong Leong Investment Bank Bhd said it is positive about this acquisition, given the attractive acquisition price with a land cost-to-gross development value (GDV) ratio of 10 per cent and good access to highways, MRT station, and other amenities. It said the demand should be good judging from the encouraging response for the adjacent Sunway Alishan project.

"Assuming a RM3.2 billion GDV over a development period of 11 years and a net profit margin of 18 per cent, the project is expected to yield about RM52.4 million in net profit per annum starting from 2027,” the investment bank said in a research note. — Bernama