IGB ... May11

It could spend as much as RM3 billion acquiring hotels and property development projects overseas.

IGB plans to look to build or acquire a few projects in the UK, Spain, Portugal, the US and Ireland where valuations are low.

IGB had ongoing hotel projects in Malaysia, with three hotels to be built in the next 30 months. IGB is currently building two hotels in Penang with a total capacity of 700 rooms, of which one will be under the St Giles Hotel brand, IGB’s international brand, and the other a Cititel Express. The third hotel, also a Cititel Express, will be located in Ipoh, Perak.

IGB’s property development projects for the next 12 months amount to about RM1 billion in gross development value, with the G Residence in Desa Pandan, which comprises 475 service apartments, being the main project costing about RM500 million.

Recurring income — which contributes 70% to 80% of revenue from hotels, shopping malls and offices — would drive the group’s performance in the near term.

On the third phase of the Mid Valley development, IGB would start building when it gets the development order, which is expected in the 3Q2011. The project is expected to cost RM500 million and will comprise offices, retail, showrooms and food and beverage outlets. This final phase of Mid Valley is expected to be completed within 30 months.

On whether the group has plans for a real estate investment trust (REIT), Tan said: “KrisAssets (Holdings Bhd) is no different from a REIT.

IGB’s transfer of The Gardens to KrisAssets will be completed by 3Q. The mall enjoys about 1.5 million shoppers per month while Mid Valley Megamall has about three million visitors pass through its doors monthly.

IGB recorded RM38.8 million in net profit for 1QFY11 ended March 31, up 9.9% from RM35.3 million in the same quarter last year. Its revenue rose from RM156.1 million in the corresponding quarter last year to RM180 million. Earnings per share as at end March this year stood at 2.67 sen, compared with 2.42 sen last year.