I-City is a mixed development strategy where about 30% of the land is owned by I-Bhd with the balance developed as a joint venture with the land owner, which is also I-Bhd founder and executive chairman Tan Sri Lim Kim Hong.
PETALING JAYA: Property developer I-Bhd is looking at expanding its land bank for its next phase of development as its existing land in Shah Alam that houses its iconic i-City is down to 40%.
Deputy chairman Datuk Eu Hong Chew said that i-City has used up 20% of its land while another 40% is still being developed.
For its urban projects, the group is looking to develop some 20.2ha to 28.3ha with a gross development value (GDV) of up to RM7bil while for townships, I-Bhd is looking at 202ha to 242ha with the same amount of GDV.
“We are looking at a new development site and proposed land banking via a joint venture,” Eu told StarBiz.
I-City is a mixed development strategy where about 30% of the land is owned by I-Bhd with the balance developed as a joint venture with the land owner, which is also I-Bhd founder and executive chairman Tan Sri Lim Kim Hong.
Lim was previously the founder of Dreamland Malaysia Bhd. He cashed out his 55% stake in 1995 for RM350mil.
After disposing of Dreamland and some other business interests, Lim bought a 28.8ha tract of land near Sungai Rasau at the western end of the Federal Highway near Klang, where the i-City development is today, through his privately-held Sumurwang Sdn Bhd.
In 2005, Lim, through Sumurwang, signed a joint-venture agreement with I-Bhd to develop the land into a mixed development called i-City.
Eu said the reason was to not burden shareholders with concerns of market uncertainties, as Sumurwang bears all the initial risks by structuring a joint-venture agreement in such a way that the land owner (Sumurwang) only gets the value of the land while the development profits accrue to I-Bhd.
To further safeguard minority interests, Eu said payment for the properties were done via the issuance of convertible securities, which has no significantly negative bearing on the cashflow of the company in the near to medium term while the pace of development is on the uptick.
“For Tan Sri Lim to benefit himself privately at the expense of minorities of I-Bhd would be a folly as it will only hurt him as a major shareholder of the company, with gains on one end negated by a confidence crisis and capital loss, should anything untoward had been put into effect,” he said.
With a successful track record, in enhancing the GDV as well as the value for its buyers, Eu said the company is headed into the current property headwinds on extremely strong financial footing with zero bank borrowings, providing its landbanking with firepower should the need arises.
Also, Eu added that many other value-enhancing initiatives are in the pipeline, ones which could probably result in its GDV exceeding RM10bil.
“Times are bad. But is there ever a perfect time though, we would ask? In hindsight, we are always late. But with foresight, we can potentially be great,” Eu said.
Currently, the group has RM743mil in unbilled sales at the end of 2015 and is building the Central i-City, which is a one-million-sq-ft mall, in collaboration with the Central Pattana Group of Thailand.
Also, the group is set to develop a four-star hotel to be managed by Double Tree Hilton in the 29.1ha freehold ultrapolis township.
