Thursday 20 Jun 2024
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KUALA LUMPUR: IOI Properties Group Bhd (IOI Prop) is looking to launch projects worth up to RM10 billion in gross development value (GDV) over the next two to three years across Malaysia, Singapore and China, said chief executive officer Lee Yeow Seng.

Of these, some 60% will be in Malaysia, said Lee. And RM3 billion out of the RM10 billion GDV worth of projects will be launched over the second half of its financial year ending June 30, 2015 (2HFY15).

“There will be about 10 projects in total, which will include Kota Warisan in Dengkil, Bandar Puteri Bangi in Bangi, as well as our projects in Singapore and Xiamen (IOI Palm City),” said Lee.

On the group’s existing land bank, Lee said it has 10,000 acres (4,047ha), which will sustain the group for “a few years”.

“Of course, we are also open to opportunities to acquire [more] land in these three markets [of Malaysia, Singapore and China],” he said.

As for its projects in China, Lee said the group does not foresee a significant impact from the cooling measures introduced by the Chinese government on the republic’s property market as some of the measures taken appear to be easing up.

“We have heard the Chinese government has reversed its policy and trying to loosen up some of the measures. The restriction on property purchases has been removed and the property lending curbs have been also removed,” he said.

However, for the group’s projects in Xiamen, Lee said it was due to the city’s strong fundamentals that it had remained less affected by the cooling measures, and had even managed to register a growth in property prices.

“Right now, in terms of revenue, the contribution [from China] is about 20% to 25%. Naturally there may be an increase in contribution as we venture into more projects there,” he said, but was unable to provide an estimate of the increase.

“There is a lot of demand in Xiamen, although the selling price is quite high. The demand is good and property is selling very well over there,” he said.

According to the group’s 2014 annual report, its second venture in Xiamen, IOI Palm City, will consist of shopping malls, boutique offices, a hotel and residences.

IOI Prop’s first project there, called IOI Park Bay and first launched in 2013, is a mixed development comprising a shopping mall, boutique offices, a five-star luxury hotel and luxury high-rise residences, which is set to be complete in 2018.

As to the impending goods and services tax in April next year, even though residential properties are exempted from it, executive chairman Tan Sri Lee Shin Cheng said the prices of such properties would still go up as the tax would still be levied on building materials and the cost of construction.

“It’s hard to say exactly how much it would increase as different locations see different demand,” he said.

IOI Prop ended three sen higher yesterday at RM2.56, with a market capitalisation of RM8.32 billion.


This article first appeared in The Edge Financial Daily, on October 28, 2014.

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