IOI Properties Looking to Increase Its Land Bank

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IOI Properties Group Bhd, which is expecting its financial year ending December 31, 2016 (FY16), to register a flat profit growth, plans to take advantage of the current poor market sentiment to increase its land bank.

IOI Properties executive chairman Tan Sri Lee Shin Cheng said yesterday the company is looking for opportunities to do so.

“Now is bad times and a lot of companies are looking to sell their property or land. IOI Properties will take advantage of this,” he told reporters after the group’s annual general meeting yesterday.

However, he declined to reveal which areas the company is eyeing.

Currently, IOI Properties’ land bank stands at about 10,000ha, spread out in Malaysia, Singapore and China.

IOI Properties recently announced it is injecting two property companies, of which Lee, his wife Puan Sri Hoong May Kuan and elder son Datuk Lee Yeow Chor are major shareholders, into the property arm of the IOI group for RM1.58 billion in cash and shares.

This will result in an increase in Lee’s indirect stake to 58.56% from 51.47% currently.

The land owned by the two companies — Mayang Development Sdn Bhd and Nusa Properties Sdn Bhd — is situated within IOI Resort City, next to the South Klang Valley Expressway. It carries an indicative gross development value (GDV) of about RM20 billion.

Lee said the upping of his stake in IOI Properties through the asset injection shows he is confident in the future of IOI Properties.

“I want to enhance my shareholdings in this company. It shows that I am confident in the future of the company, that it will grow. [The land] is good property that will enhance the development of IOI Properties,” he added.

Once completed, IOI Properties’ land bank in IOI Resort City will be enlarged to 161.87ha from its existing 20.23ha and will provide avenue for IOI City Mall’s second phase of development.

Lee said IOI Properties expects to begin construction of Phase 2 of IOI City Mall after the first half of FY16; Phase 1 has achieved a take-up rate of 92% and is expected to be fully taken up before Phase 2 starts.

Meanwhile, he said IOI Properties is confident of maintaining its profit for FY16, despite a slowdown in the property market, and is targeting RM2 billion in sales.

Its FY15 profit came in relatively flat at RM890.7 million compared with RM889.92 million in FY14, although its revenue rose 31.72% to RM1.91 billion from RM1.45 billion.

IOI Properties chief executive officer Lee Yeow Seng, who was also present, said FY16’s sales target is higher than FY15’s RM1.9 billion, and will be contributed by projects like Kota Warisan in Sepang, Le Pavillion in Puchong Jaya, a new township in Bandar Puteri Bangi, and IOI Palm City.

“The total GDV for the development (IOI Palm City) in Xiamen is one billion yuan (RM667.83 million). Phase 1 has been fully sold out since its launch in May. We have locked in 550 million yuan in sales,” he said, adding that Phase 2 is targeted to be launched in the second quarter of next year. – The Edge Markets, October 27, 2015.

 

News source: (The Malaysian Insider)

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