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Thursday, May 27, 2010

IGB looks to expand hotel ops overseas

With almost half of its profits from hotel division, property developer IGB Corp Bhd plans to expand the business overseas, namely to Japan, China and Indochina.

Its managing director Robert Tan Chung Meng said the group will either buy existing hotels or develop new ones abroad.

"We are looking at the possibility of acquiring the existing ones, mostly those which are under distress. In such cases, it is easy for us to spread our business activities in this sector if we acquire those existing hotels, which are mostly located strategically within city centres," he told reporters after the group's annual general meeting in Kuala Lumpur yesterday.

The group now manages a hotel in the UK and owns several hotels locally, including the Cititel hotel chain, MiCasa All Suites, The Gardens Hotel, The Boulevard Hotel and the Pangkor Island Beach Resort.
IGB is set to launch its three-star hotel in Makati, the Philippines in the next three weeks.

Financially, IGB expects to maintain profitability for this financial year ending December 31 2010.

Last year, it registered a net profit of almost RM159 million, up against RM155 million previously. This was achieved on the back of RM642 million in revenue for 2009, compared with RM688 million previously.

Yesterday, IGB announced that the group made a net profit of RM42 million for its first quarter ended March 31. This was highwer from RM39 million posted over the corresponding period last year.

Moving forward, Tan said IGB will focus on property investment, rather than property development.

"I don't expect to see any new project launches this year, despite several proposals that have been lined up for approvals from the authorities. We want to optimise our existing assets," he said.

Tan said contribution from property investment and management exceeded RM90 million last year compared with the previous year's revenue of about RM60 million.

Despite a subdued market and strong competition from new offices, the division recorded an average occupancy rate of above 90 per cent.

Tan also provided an update of the Mid Valley City Phase 3 project, which was put on hold in 2009.

With a gross development value of RM500 million, he said the Mid Valley City Phase 3 has been re-planned as a commercial development and will proceed upon approval.

By Business Times

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