Work on Mid Valley City Phase 3 to begin

KUALA LUMPUR: IGB Bhd will commence the building of Mid Valley City's third phase in the next few months, while two other development projects are also set to take off.

In its annual report released on Wednesday, Apr 20, IGB said the last phase of the Mid Valley City development, Mid Valley City Phase 3, was planned as a commercial development with an office and a retail building with an estimated gross built-up area of more than one million sq ft.

An analyst reckoned the project would take off in the next few months, pending approvals from the authorities.

The analyst said IGB would likely use some of the RM215 million in cash it would receive for the sale of its entire holdings in Mid Valley City Gardens Sdn Bhd to KrisAssets Holdings Bhd to fund the project.

Mid Valley City Gardens is the owner and operator of The Gardens Mall, a retail property located in Mid Valley City. IGB has a 75% stake in KrisAssets.

The analyst said phase three of Mid Valley City was the last parcel of land to be developed.

"After this project, IGB is done with the Mid Valley area and it will be riding on the rental appreciation from the mall and office space," he noted, adding that rentals in the area were expected to trend upwards.

The property developer has on the drawing board two other projects with a combined gross development value (GDV) of RM426 million. One project, tentatively named G Residence, is a mixed development located in Jalan Kampung Pandan overlooking Lingkungan U Thant. Comprising two 23-storey towers with 475 service apartments and a retail podium with F&B outlets, this development is scheduled to be launched by 3Q2011.

The other planned development is a 166-unit condominium in Jalan Tun Razak which is awaiting approvals from the authorities.

Additionally, IGB has 129 acres (52.2ha) of prime landbank and the Kundang development of 85 double-storey houses in Rawang.

IGB achieved a net profit of RM174.6 million for FY10 ended Dec 31, a 10% jump from its RM159 million net profit in FY09. This expansion in its bottom line was mainly due to improved results from property development as well as the property and investment and management divisions.

The property and investment and management divisions contributed 59.2% to IGB's RM719.4 million revenue for FY10. Its hotel and property development segments contributed 28% and 10% respectively.

The Mid Valley City area is set to be one of the hottest postcodes in the city as S P Setia's RM6 billion KL Eco City will be located opposite Mid Valley Megamall. The project which will be built in three phases over 10 years will comprise office towers, condominiums, signature offices and a retail area.

The 4.5 million sq ft Mid Valley Megamall opened in 1999 with about 400 stores on 5½ floors. It has a convention centre and two hotels — Cititel and Boulevard.

The Gardens at Mid Valley City, which opened in September 2007, is the second phase of Mid Valley City. The Gardens as it is commonly known contains a high-end shopping mall with branded labels. It also has four towers comprising residential units, offices and a hotel.