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SINGAPORE (Feb 1): Phillip Capital says Aspen (Group) Holdings’ flagship project, the 245-acre Aspen Vision City (AVC) in Penang, Malaysia, could benefit from the creation of communities and opportunities.
“With the full works of residential, commercial, office, retail components as well as schools and medical facilities, AVC is set to welcome new communities of residents and workers alike. New employment will be created once the retail and industrial components come online,” says Phillip’s research team in an unrated report on Thursday.
On a recent site visit to AVC, Phillip’s analysts note the presence of a few factories in the vicinity, including Hewlett-Packard (HP), Western Digital, Boston Scientific, and Boon Siew Honda.
“AVC could be a catchment area for workers or visitors of these factories,” Phillip says. “We believe the presence of MNCs such as Flextronics, HP and Western Digital will see other industrial players follow suit, attract FDI inflow and set the tone for an uptick in property prices.”
In addition, Phillip notes that most of the applications for Aspen’s residential units are Mainland Penang residents, – and a notable proportion of which are first-time home buyers. According to the research house, this signals a migration of households to AVC.
Located at the mouth of Penang’s second bridge, AVC is an 80:20 joint venture between Aspen and Ikea Southeast Asia, though owner Ikano.
With a gross development value of 10 billion ringgit ($3.4 billion), some 170 acres of AVC has been set aside as mixed development land, 51 acres for a regional integrated shopping centre, and 24 acres for an IKEA store.
“[The IKEA] store in AVC will be the first in the northern region of Peninsular Malaysia,” says Phillip. “It is slated to operate in 1Q19 and is expected to be one of AVC’s main draws.”
“Track record and execution ability going forward has potential to pave the way for other similar partnerships with Ikea and/or other developers,” Phillip adds.
As at 1.28pm, shares of Aspen are trading half a cent lower at 21.5 cents.