KUALA LUMPUR: IGB Corp Bhd will use the proceeds from the listing of IGB Reit (real estate investment trust) to fund its organic and inorganic growth in the near future.
Its chairman Tan Sri Abu Talib Othman and group managing director Robert Tan Chung Meng said the organic growth would be driven by Megamall and The Gardens Mall, which offer numerous asset enhancement opportunities for the group.
“Having gone through only one cycle of rental revision, the five-year-old Gardens Mall should act as a growth driver for IGB Reit. With a sizeable 54.2% of occupied net lettable area expiring in the financial year ending Dec 31, 2013, the second round of rental adjustment will give the mall the opportunity for an upward revision,” they said in the company’s 2012 annual report.
According to Talib and Tan, with the increasing competition for retail space, IGB’s objective is to ensure that Megamall and The Gardens Mall are well managed and investors see year-to-year growth of 5% to 8%.
On the first major project in Johor, the group said it is awaiting approval from the various authorities. “We are hopeful of commencing construction by mid-2013 with completion targeted for 2018 or 2019,” it said.
The development of Southkey Megamall in Johor is a joint development between IGB and Selia Pantai Sdn Bhd. The approximately 1.5 million sq ft mall will be complemented by one or two hotels, high-end residences and commercial components
The group’s Cititel properties in Ipoh and Penang are on track to be opened by the fourth quarter of next year. “However, whether locally or abroad, our focus will remain on the development of centrally located city hotels, where our strength lies,” said the group.
This article first appeared in The Edge Financial Daily, on May 2, 2013.
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