Friday, October 25, 2013

I-Bhd embarks on new to develop RM820mil condo project near KLCC

Updated: Friday October 25, 2013 MYT 8:02:07 AM
I-Bhd embarks on new to develop RM820mil condo project near KLCC

PETALING JAYA: I-Bhd has purchased about a 0.40ha piece of land for a proposed project with a gross development value of RM820mil in the vicinity of the Kuala Lumpur City Centre (KLCC) as part of its next growth phase, said deputy chairman Datuk Eu Hong Chew.

“We have reached a stage where we have to look beyond i-City in Shah Alam,” he said in a telephone interview with StarBiz. I-Bhd is the master developer of i-City.

The parcel of land, located in Jalan Changkat Kia Peng, was purchased by I-Bhd subsidiary I-Marcom Sdn Bhd from Sumuracres Sdn Bhd for RM132mil, or RM2,884 per sq ft.

Sumuracres is a subsidiary of Sumurwang Properties Sdn Bhd, which, in turn, is wholly owned by Sumurwang Sdn Bhd where Tan Sri Lim Kim Hong, I-Bhd’s executive chairman, has a substantial shareholding, said I-Bhd in a press release.

“The RM132mil purchase price is to be settled by redeemable convertible unsecured loan stocks (RCULS). The RCULS would have a five-year tenure with an average coupon rate of 3.4% per year and can be converted to I-Bhd ordinary shares at RM3.20 per share,” the release said, adding that this represented a 15% premium to its five-day volume weighted average market price. The conversion can be done from the third year onwards.

On whether minority shareholders would stand to benefit from this related-party transaction, considering the rather small land size and the undulating contour of the land, Eu said that I-Bhd stood to gain 23% from the deal.

“If I take the selling price (of the project) less my development cost, land price and marketing costs, then I-Bhd would gain a profit of 23% as a percentage of the revenue,” Eu said.

The project will have a plot ratio of 1:10, meaning that the developer would be able to build up to 10 times the size of its land area.

A Bursa Malaysia filing indicated that the company planned to build a 50-storey luxury condominium in a development called Grand i-Residence. It will comprise 127 units of small office home office or SoHo and 315 units of serviced apartments in sizes ranging between 650 sq ft and 1,200 sq ft. All the units will be fully furnished and sold at an average selling price of RM2,300 per sq ft.

On the current oversupply of luxury condominium units in the KLCC vicinity, Eu said there was a lack of smaller units in that area.

Separately, it had been reported several months ago that the former residence of the German ambassador in the same vicinity with a land area of 80,000 sq ft was up for sale for RM200mil. However, there has been no progress thus far.

Further, in August, it had also been reported that the trustees of the Loke Wan Yat estate had sold a 1.38ha parcel of freehold land in Jalan Ampang, sandwiched between Wisma Central and a Chinese temple, for about RM495.34mil or RM3,325 per sq ft. The deal has since hit a snag.

Publish date: 25/10/13

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