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Monday, July 12, 2010

IJM hopes talks on JV Selangor flood project can conclude soon

PETALING JAYA: Radiant Pillar Sdn Bhd, a 50:50 venture between IJM Land Bhd and Kumpulan Europlus Bhd (K-Euro), which is undertaking the proposed development of the 2,500-acre Canal City land in Selangor, is negotiating with a state government agency to mutually settle the termination of the flood mitigation project for Canal City.

'This is a good window period to launch higher margin products' says IJM LAND BHD MD DATUK SOAM HENG CHOON

“Hopefully the negotiation can be wrapped up soon,” IJM Land managing director Datuk Soam Heng Choon told StarBiz.

Under an earlier agreement with the previous state government, the deal involved a flood mitigation project in the form of an 18km-canal linking Sungai Klang and Sungai Langat. In return the company will be awarded the land for development.

However, the new state government, which took over after the March 8, 2008 general election, has decided that there is no need for the flood mitigation project.

It is understood the settlement potentially includes the outright purchase of the land from the state government.

Radiant Pillar has started part of the work and a settlement has to be worked out with the state government.

IJM Land’s parent, IJM Corp has a 25% stake in K-Euro.

A source revealed that the state government preferred the joint venture company to buy the land outright.

If it materialises, the land, located directly behind the matured Kota Kemuning township, will turn IJM Land into one of the leading township developers in the Klang Valley.

For the financial year ended March 31, 2010 (FY10), IJM Land turned in record sales of RM1.25bil against RM733mil registered in FY09. The company has lined up RM1.5bil worth of projects for launch in the current financial year.

Soam said IJM Land would leverage on its strong property sales to launch more higher end projects in the coming months.

“With the prevailing low mortgage rates and stronger market sentiment, this is a good window period to launch higher margin products,” Soam said.

He said the company would remain vigilant of any change in market sentiment, especially in the external front, and would implement the necessary strategies to stay competitive.

In the last two years, its projects in Penang were the major contributors to property development earnings, accounting for more than 30% of group earnings.

With gross development value of RM6bil, The Light project in Penang is the largest in IJM Land’s portfolio

The major earnings driver going forward will be its flagship waterfront development, The Light, featuring residential, entertainment, business and hospitality facilities in one hub.

With gross development value (GDV) of close to RM6bil, the 152-acre mixed residential and commercial development is the largest project (in terms of development value) in IJM Land’s portfolio. The project will be developed over the next 12 to 15 years.

Since its launch last year, RM280mil in sales have been registered from The Light.

In Johor, IJM Land owns 1,188 acres in Kota Tinggi, near Desaru, which is being developed under the Sebana Cove resort-cum-residential project. Planning is now in progress to transform it into an upmarket eco-friendly and health-cum-lifestyle themed residential and marina resort development.

The 10-year project is expected to have its maiden launch in the later part of 2011.

Soam said IJM Land was also targeting the growing Kota Kinabalu market and planned to launch an exclusive condominium project, with a panoramic view of Likas Bay and Kota Kinabalu city centre later this year. The 8-acre project has a GDV of RM160mil.

Soam said that under the company’s long-term strategy, it was looking to venture into new markets such as Vietnam, China and Indonesia.

However, contribution from overseas would not be significant in the next three years.

“Initially, we will take on small and more manageable sized projects and will expand gradually according to market needs.”

IJM Land’s maiden offshore project will be a mixed development in Vietnam comprising four blocks of high-rise residential apartments and retail and commercial property on 2.85 ha in Phu Hoi commune, Nhon Trach city centre in Dong Nai Province.

Last month, it acquired a 70% stake in Sova Holdings Sdn Bhd which is undertaking the US$150mil joint-venture development with Thai Duong Company-Sunco, a Vietnam state-owned company.

Piling work for the initial phase is currently in progress and the sales launch is expected to be in the third quarter of this year.

In China, the company has a RM500mil upmarket residential and retail development in Changchun, the capital city of Jilin province in northeast China.

“We are in the plan submission stage now and is working towards launching the project next year,” Soam said.

By The Star

Ivory Properties to raise RM45m from IPO

Penang-based Ivory Properties Group Bhd, enroute for listing on the Main Board of Bursa Malaysia by end of this month, expects to raise RM44.9 million from its initial public offering (IPO).

Proceeds from the IPO will be used to repay bank borrowings and for working capital, said Chairman/Group Chief Executive Officer Datuk Low Eng Hock in a statement today.

The IPO consists public issue of 44.9 million new ordinary shares at RM1 offer price per share comprising 9.3 million new shares for application by the Malaysian public.

A total of one million new shares have been reserved for eligible directors, employees and business associates of Ivory and subsidiaries and 570,000 new shares for Bumiputeras.

In addition, 16.17 million shares are offered at RM1 offer price to Bumiputera investors.

"The listing will further enhance Ivory and its subsidiaries’ ability to complete the property development projects and will also beef up financial muscle to undertake bigger projects, both within the country and abroad," he said.

The company is forecasting a proforma consolidated profit after tax of about RM33.86 million for the financial year ending Dec 31, 2010.

Last year, it registered RM17.7 million in profit after tax.

Established in 1999, the property development company has secured projects with a gross development value (GDV) of RM1.51 billion comprising completed and on-going projects.

The completed property development projects accounted for GDV of about RM675.62 million while the on-going projects accounted for GDV of about RM834.09 million which are slated for completion in the next few years.

Ivory's future property development projects include Penang Times Square''s (Phase 3 and Phase 4), Mount Erskine Development comprising The Peak Residences, Taman Bukit Erskine, The Latitude and City Mall at Jalan Tanjung Tokong," he added.

By Bernama

Dubai World property arm sells off Malaysia stake

DUBAI, United Arab Emirates: A property arm of struggling state conglomerate Dubai World is backing out of a plan to build luxury homes in Malaysia as it looks to shore up its finances.

The cash-strapped company's Limitless division is selling off its stake in a partnership with Malaysia's UEM Land Holdings Berhad to develop waterfront land in the southern city of Nusajaya.

Limitless will generate about US$23.8 million in the deal, according to a regulatory filing on Malaysia's stock exchange.

Limitless said in a statement Sunday that it continues "to review our business activity to reflect market conditions."

The company's parent Dubai World needs cash as it works to pay back $23.5 billion in debt.


Bandar Raya firm buys Limitless' 60pc stake in builder

PROPERTY developer Bandar Raya Developments Bhd said its subsidiary has bought 60 per cent of a building company from a unit of state-owned conglomerate Dubai World.

Bandar Raya's subsidiary Ardent Heights has entered into a deal to buy Limitless Holdings Pte Ltd's entire stake in Haute Property Sdn Bhd for a nominal sum of RM1, the Malaysian firm told the stock exchange.

Ardent will pay Limitless RM75 million which Limitless had advanced to Haute towards partial payment by Haute for the development rights of a building project in Johor.

Ardent will also pay Limitless RM1 million to settle about RM10 million advanced by Limitless to Haute to meet Haute's operating and development expenses for the project, Bandar Raya said.
Malaysian builder UEM Land owns the remaining 40 per cent in Haute.

Dubai sent global markets into turmoil at the end of last year when Dubai World asked creditors for a standstill on debt mainly linked to its two property firms Limitless World and Nakheel, builder of the Gulf state's eye-catching palm-shaped islands.

Dubai had said on July 3 a committee overseeing Dubai World, which is in a deal with core lenders to restructure US$23.5 billion (RM75 billion) in debt, had handed responsibility of property unit Limitless to Nakheel.

By Reuters

'Mah Sing revenue could rise to RM7.5b'

Property developer Mah Sing Group Bhd is likely to record a revenue increase of 18 per cent to RM7.5 billion and improve earnings sustainability to six-seven years with the recent land acquisitions and unbilled sales.

In a research note today, Kenanga Investment Bank Bhd said the three projects on the acquired land were located in matured areas with high population catchment, ample accessibilities and large upgraders market since there were few new developments in these areas.

"We are comforted by the group's proactive management in replenishing its gross development value given the rapid launches and swift sales," it said.

The investment bank said the positive improvement in its revenue would include the RM1.1 billion unbilled sales.

It said replenishing township developments via Kinrara project was a plus as the group's existing township landbanks were depleted while mass market provided steady cash flow and tended to be self-financing.

"Although the three new projects will bring in substantial future revenue, the group intends to pace its other project launches to achieve steadier 20 to 25 per cent year-on-year growth over a longer period as opposed to sharp over 25 per cent growth over a shorter term," it said.

Meanwhile, MIDF Research said the proposed developments would provide earnings visibility as well as a buffer to the proposed IFRIC15 standard, where the group might see some lumpy earnings.

In its research note, MIDF said it anticipated a slowdown in land acquisitions from the group in near future as orderbooks remained full and an increase in overnight policy rate might decrease potential and attractive landbank valuations.

Mah Sing rose three sen, or 1.775 per cent, to close at RM1.72.

By Bernama

Mah Sing gains on land purchase

Mah Sing Group Bhd, a Malaysian property group, rose the most in five days in Kuala Lumpur trading after agreeing to acquire land with a combined gross development value of RM1.1 billion (US$340 million).

The stock gained 1.8 per cent to RM1.72 at 11:07 am local time, set for its steepest increase since July 7.

By Bloomberg

LBS Bina plans Sukuk programme for housing devt project

KUALA LUMPUR: LBS BINA GROUP BHD share price unchanged at 48 sen at midday Monday, July 12, ahead of proposed multi-million ringgit Sukuk programme to finance its housing development projects.

At 12.06pm, unchanged at 48 sen, off early high of 49.5 sen with 88,200 shares done.

MIMB Investment Bank Bhd to sign with LBS Bina on Tuesday to be its principal adviser and lead arranger for Sukuk programme.

The Islamic securities issuance will be guaranteed by Danajamin Nasional Bhd, the nation's first financial guarantee insurer.

By The EDGE Malaysia