IJM ... Jul10

Radiant Pillar Sdn Bhd, a 50:50 venture between IJM Land Bhd and Kumpulan Europlus Bhd (K-Euro), which is undertaking the proposed development of the 2,500-acre Canal City land in Selangor, is negotiating with a state government agency to mutually settle the termination of the flood mitigation project for Canal City.

Under an earlier agreement with the previous state government, the deal involved a flood mitigation project in the form of an 18km-canal linking Sungai Klang and Sungai Langat. In return the company will be awarded the land for development. However, the new state government, which took over after the March 8, 2008 general election, has decided that there is no need for the flood mitigation project.

It is understood the settlement potentially includes the outright purchase of the land from the state government. Radiant Pillar has started part of the work and a settlement has to be worked out with the state government.

IJM Land’s parent, IJM Corp has a 25% stake in K-Euro.

A source revealed that the state government preferred the joint venture company to buy the land outright. If it materialises, the land, located directly behind the matured Kota Kemuning township, will turn IJM Land into one of the leading township developers in the Klang Valley.

For the financial year ended March 31, 2010 (FY10), IJM Land turned in record sales of RM1.25bil against RM733mil registered in FY09. The company has lined up RM1.5bil worth of projects for launch in the current financial year.

IJM Land would leverage on its strong property sales to launch more higher end projects in the coming months.

In the last two years (2008-2009), its projects in Penang were the major contributors to property development earnings, accounting for more than 30% of group earnings.

The major earnings driver going forward will be its flagship waterfront development, The Light, featuring residential, entertainment, business and hospitality facilities in one hub.

With gross development value (GDV) of close to RM6bil, the 152-acre mixed residential and commercial development is the largest project (in terms of development value) in IJM Land’s portfolio. The project will be developed over the next 12 to 15 years.

In Johor, IJM Land owns 1,188 acres in Kota Tinggi, near Desaru, which is being developed under the Sebana Cove resort-cum-residential project. Planning is now in progress to transform it into an upmarket eco-friendly and health-cum-lifestyle themed residential and marina resort development.

The 10-year project is expected to have its maiden launch in the later part of 2011.
Soam said IJM Land was also targeting the growing Kota Kinabalu market and planned to launch an exclusive condominium project, with a panoramic view of Likas Bay and Kota Kinabalu city centre later this year. The 8-acre project has a GDV of RM160mil.

Soam said that under the company’s long-term strategy, it was looking to venture into new markets such as Vietnam, China and Indonesia.

However, contribution from overseas would not be significant in the next three years (2010-2012).

IJM Land’s maiden offshore project will be a mixed development in Vietnam comprising four blocks of high-rise residential apartments and retail and commercial property on 2.85 ha in Phu Hoi commune, Nhon Trach city centre in Dong Nai Province.

In June 2010, it acquired a 70% stake in Sova Holdings Sdn Bhd which is undertaking the US$150mil joint-venture development with Thai Duong Company-Sunco, a Vietnam state-owned company.

In China, the company has a RM500mil upmarket residential and retail development in Changchun, the capital city of Jilin province in northeast China.