IJM Land attracts suitors in London

KUALA LUMPUR: While it is just about to launch its first property project in London this week, IJM Land Bhd said it has been offered a string of other opportunities in the UK capital.

“We have already had offers for joint ventures (JV) from a lot of London parties for mix development projects and we will consider them,” said IJM Land CEO and managing director Datuk Soam Heng Choon after a briefing last Friday.

“They know we are there [London], they know we have a big portfolio in Malaysia, and they also look for developers who can perform in Malaysia to be their partner,” he said.

Despite the various offers, Soam said IJM Land will focus on its first project in London, the Royal Mint Gardens, before taking up another offer.

“We are always looking at these opportunities, but we need to get our Royal Mint Gardens project off the ground before looking at anything else,” Soam said.

The Royal Mint Gardens, located on Royal Mint Street in Central London, has a gross development value (GDV) of £200 million (RM1.01 billion) for its first phase.

Priced from £465,000 to £1.9 million, phase one of the 2.7-acre (1.08ha) mixed development project will comprise 254 apartment units with built-ups ranging from 387 sq ft to 1,431 sq ft.

The first phase is expected to be completed in the fourth quarter of 2017, while its second phase — which will see the development of a hotel, serviced apartments and other residential units — will commence in 2018.

“We have already seen a pre-sale take-up rate of 40% from London buyers, and we expect this to increase to between 60% and 70% with the upcoming launch,” Soam said.

The group will be launching its Royal Mint Gardens in Kuala Lumpur on Friday, followed by a launch in Singapore and Hong Kong.

Soam:  We need to get our Royal Mint Gardens project off the ground before looking at anything else.

IJM Land adds to a list of Malaysian investors in London such as Permodalan Nasional Bhd (PNB), Employees Provident Fund (EPF), S P Setia Bhd, Sime Darby Bhd, Amcorp Properties Bhd, Oriental Holdings Bhd, Eastern & Oriental Bhd as well as privately-owned AlloyMtd Group.

Soam said the London property sector will likely see more Malaysian developers venturing into the UK capital due to increasing opportunities.

IJM Land COO and chief financial officer Edward Chong said the group aims to grow its overseas exposure to 10% from less than 5% now. Of its total GDV of RM37 billion, overseas projects now account for only about RM1 billion in GDV.

IJM Land has undertaken development projects in Singapore, Australia and India and at present, embarking on projects in London, China and Vietnam.

IJM Land’s China and Vietnam launches are under construction and are expected to be completed next year.

“We are doing pre-selling for these projects now, but the official launch will be in 2014,” Soam said.

He said with IJM’s aim to expand its overseas ventures, Malaysia will continue to be the group’s greater focus.

“The residential market in Malaysia is more vibrant than the office market, so we will mainly focus on residential projects for now.”

Last Thursday, IJM Land announced a 50:50 JV with FCW Holdings Bhd for a mixed project on four parcels of land in Geran Mukim Batu.  

The JV will acquire the 15.41-acre land, which is expected to produce a GDV of about RM1.5 billion, from FCW for RM187.97 million, or RM280 per sq ft.

According to AmResearch’s Mak Hoy Ken, IJM Land chalked up new property sales of over RM500 million in the first quarter of financial year 2014 ended June 30 (1QFY14).  

“For the first four months of FY14F, IJM Land has launched roughly RM1 billion out of the RM3 billion target for FY14F,” said Mak in a recent report.

He said the new launches in the pipeline are RM1.2 billion worth of properties in the Klang Valley and Seremban, Penang (RM300 million), Seremban (RM300 million), southern region (RM300 million) and East Malaysia (RM150 million).

RHB Research’s Loong Kok Wen expects IJM Land to achieve its sales forecast of RM2.3 billion for FY14 compared with RM2 billion for FY13.

He said in a recent report that IJM Land should see a recurring net profit growth of 47.6% for FY14, adding that over the next two years, its earnings will be underpinned by RM1.4 billion worth of unbilled sales.


This article first appeared in The Edge Financial Daily, on September 23, 2013.