SINGAPORE (Aug 22): Luxury residential property developer Bukit Sembawang Estates is moving to unlock value for its shareholders by converting some agricultural land into residential properties. For investors with a longer time horizon, the stock may now be a bargain.

In its annual report for FY2016 ended March, released on July 8, the company said that it is “unlocking the potential value of Lot 12949 MK18, an agricultural land, by converting it into a 99 year leasehold residential development, as enhancement of its land use and development value”. The move to convert this plot resolves a dispute with the Singapore Land Authority (SLA) that dates as far back as 2002.

“Given the protracted nature of this dispute, the resolution is a good outcome for shareholders,” says Christopher Wong, senior investment manager at Aberdeen Asset Management. In its FY2002 annual report, Bukit Sembawang said that it had applied to re develop the land. However, it was told by SLA that it would also need to apply for the lifting of the building restriction on the title. Bukit Sembawang argued that the building restriction did not apply.

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