Full-fledged property player

KUALA LUMPUR: Ideal United Bintang Bhd (IUB), formerly United Bintang Bhd, will be turned into a full-fledged property player by next year, with Penang-based property developer Ideal Property Group set to inject its assets into the company.

In an interview with The Edge Financial Daily, IUB chairman Datuk Alex Ooi said the company’s business is currently divided equally between reconditioning heavy equipment and machinery, and property development.

“We will be injecting our properties into the company when we do our corporate exercise. We have gotten the approval from our shareholders and Bursa Malaysia to transform the business into property development,” said Ooi.

Development projects with a gross development value (GDV) of RM1.5 billion are in the pipeline for IUB, among them a development project in Tanjung Pinang with a GDV of RM500 million, and a project in Bayan Lepas with a GDV of RM1 billion.

“We will be slowly selling off the assets of the existing business to its suppliers and contractors to make way for the property development business, “said Ooi.

Ooi had acquired 32% in United Bintang through his private vehicle, ICT Innotech Sdn Bhd in October last year and was also appointed as chairman of the group.

At its recent extraordinary general meeting, the group obtained the approval to change its name to IUB to better suit the change in dynamics of its business.

Ooi is no stranger to property development, as his private vehicle Ideal Property Group is a renowned developer in Penang, and its projects launched in 2012 and 2013 have a combined GDV of RM1.8 billion.

The group is currently looking to launch four projects this year in Penang, namely the Imperial Residences, Solaria Residences, Tanjong Pinang and Ideal Vision Park ( Phase 4).

The four projects have a combined GDV of RM1.8 billion, and the group has 185 acres of undeveloped land bank in Penang.

On plans for property development projects outside of Penang, Ooi said the group was in negotiations for projects in Kuala Lumpur.

“We are looking at property projects in the Taman Melati area in Gombak, as well as in the Glenmarie area, but it is still at the negotiations stage,” said Ooi.

The group has no immediate plans to venture into property development overseas in the near future, though Ooi said that if he were to consider overseas markets, he would venture into Cambodia and Indonesia.

“Our focus is to build our name in the local market first before venturing overseas as Ideal Property Group aims to be the Penang home based strongest and biggest developer,” said Ooi.

Ooi is also a director in Ideal Sun City Holdings Bhd, which is listed on the ACE Market of Bursa. Ideal Sun City is primarily involved in the provision of project management services for commercial and residential property developments.

“Under the Ideal Group, we have three upcoming hotel projects, and our plan is to develop and sell these hotels to Ideal Sun City to provide hotel management services,” said Ooi.

He added that as a start for Ideal Sun City to gain experience in the hotel management business, it will purchase 30 units in The CEO in Penang, which is Ideal Property’s small office home office (SOHO) units and convert these units into service apartments.

The first hotel is scheduled to be developed next year in the Bayan Lepas area, while the other two hotels are scheduled to be developed over the next three years.

On the outlook for the property market in Penang, Ooi says the demand is still intact, citing that the take up rate for Imperial Residences and the Solaria Residences have been an encouraging 70% to 80%,

“The challenge [in the property sector] is obtaining good landbank and the approvals process for it and additionally obtaining workers is an issue, as language barriers and a lack of skill are among some of the problems faced,” said Ooi.

He added that implementation of the goods and services tax next year would be a challenge as well, as the market is a purchaser market, and the developers would need to swallow the effects of price hikes.


This article first appeared in The Edge Financial Daily, on May 26, 2014.