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Sunday, November 23, 2008

I-BHD Building a legacy

I-BHD executive chairman Datuk Lim Kim Hong thinks he is building an intelligent city. He is doing that and more. He is building a legacy.

Lim likens i-City to Hong Kong’s Cyberport.

Lim likens i-City to Hong Kong’s Cyberport and to Dubai’s Internet City and Media, but on a very much smaller scale. His two boys, Boon Siong, 35, and Ricky, 31, are deputy CEO and chief innovation officer respectively, are helping him.

Lim, 58, has reached a stage in his life where financial returns are no longer the main driving force. He wants to make a contribution to society. The other force driving him is his interest in technology and innovation.

Lim is not the regular entrepreneur. In the 1970s, his corporate vehicle Sumurwang introduced Dreamland brand of mattresses. Dreamland Holdings Bhd subsquently diversified into the stainless steel industry in the early 1990s and was renamed Kanzen Bhd.

Sumurwang later divested Kanzen, took an interest in Sanyo Industries Malaysia Bhd, renamed it I-Bhd and brought out a plethora of “i” brand of digital products. In 2006, I-Bhd went into the property development sector. On the unrelated nature of his past ventures, Lim says the formula remains the same.

“The word today is ‘innovation’ and because we have gone into property development, I want innovation to play a bigger role in what we put up,” he says.

When he steered the company into property development several years ago, the plan was to ultimately have two revenue streams - property development and technology - independent of each other.

Says its director Eu Hong Chew: “In about five years, property development may contribute between 60% and 70% to the group and technology the rest. One of the ways would be to offer our IT services to other developers. This will provide us with an independent IT revenue stream. The idea is to take their IT services out of i-City into other projects.

Eu says as the economy becomes more challenging, companies will look towards technology, especially IT, to help control and manage their business. “Despite the current global slowdown, our broad business direction remains relatively unchanged,” says Eu.

Like KLCC, Sentral, Mid Valley City, Bandar Utama city centre, Lim is delighted that i-City has already been given MSC Cybercentre status. Phase one, comprising about 300,000 sq ft of office space, is officially open for leasing.

Phase two with 200,000 sq ft of office space in three and five-storey units will be ready in the third quarter of next year. This will be another en bloc sale. They are in talks with investors from the Middle East, Japan, S Korea and Singapore.

“When the customer moves in, all the network, telephone infrastructure will be ready,” he says.

The entire 72 acres will take be ready in 2015 and comprises a mall with cinema facilities, several office towers and a lake of about 40 acres and park, a hotel and a small number of residential development.

Work on the mall is expected to begin in the first quarter of next year and will take three years go complete.

Eu says when i-City was planned three to four years ago, they asked themselves: What does knowledge-based office workers want? Broadband, events hall, concierge, parks and supporting amenities like food and beverage, malls and retail and a well-managed entity came into mind.

With their joint-venture partners - Sydney-based ServCorp and US-based networking equipment supplier Cisco Systems Inc among two of them - Eu and his team began to package the space accordingly.

“We are not doing a regular office commercial project, we are targeting a category of clients who like the nice perks and facilities that come with space, greenery and conveniences,” he says.

A central data centre will house the computers instead of individual companies having their own server rooms. This will be ready in the first quarter of next year. ServCorp will manage the place and Cisco, its broadband element.

There have been a lot of behind-the-scene negotiations to get the local authorities approvals for entertainment, tourism and technology elements. Incidentally, there are no cinemas, pubs or other forms of entertainment in Shah Alam due to state restrictions so i-City will certainly transform the township.

Notwithstanding the global crunch, the office environment is moving towards a greater need for conveniences, which is why ServCop and Cisco have been brought in, says Eu. When the project was first launched three years ago, the gross development value was RM1.5bil. It is estimated to exceed RM2bil today.

I-Bhd will keep between 30% and 40% of the development for recurring income and sell the rest to institutional investors. The mall, all the car parks and office towers will be kept for recurring income.

“In order to comply with MSC requirements, we have to manage the place and as such, we might as well deal with as few authorities as possible, hence, the en bloc sale. That was how it all evolved two to three years ago.

“I-City will be on a very much smaller scale compared to the international intelligent cities in Dubai and Hong Kong. As for the MSC Cybercentres in Bandar Utama, Sentral and Mid Valley, these are developments which are about 10 years old. It was only subsequently that they were given MSC status. Unlike them, we are building I-City from ground zero,” says Eu.

By The Star

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