I-Bhd eyes 50pc profit from property devt

I-Bhd, the developer of the digital township i-City, expects property developments to contribute half of its net profit in the next few years with 40 per cent coming from its leisure business and the balance from its property investments.

After launching its serviced apartment project dubbed the i-Residence last month, the group is expected to start the construction of its 93,000 sq m CityMall shopping mall by year-end, Group Chief Executive Officer Datuk Eu Hong Chew told reporters after the group's Annual General Meeting here today.

Asked how it is going to finance the mall's construction, he said the group is looking for joint-venture partners to implement the project with an expected development cost of around RM600 million, adding the group will manage the mall's parking bay.

He said I-Bhd hopes to sign a joint venture agreement by year-end.

Besides the mall, I-Bhd has some projects in the pipeline like the Small Office Home Office units to be launched in August and Small Office Versatile Office Units in November this year.

Next year the company plans to develop, subject to shareholders' approval, a high-rise residental project, the Grand i-Residence, on a 0.4 ha. piece of land in Changkat Kia Peng.

Eu said the group's leisure business has turned out to be very profitable. Since the launch of i-City's first leisure product, the "City of Digital Lights" in December 2009, the leisure business revenue has grown from RM2.8 million in 2010 to RM17 million in 2011, he said.

I-Bhd has invested RM30 million for the leisure business and will invest another RM25 million this year for a 9,300 sq m children's gymnasium and a 1.6 ha. water theme park, he said.

The gymnasium and water park will be opened to the public in August and November respectively, he said.

Eu said I-Bhd targets to invest RM100 million in the leisure business in five years, and all the theme park rides and attractions currently on land reserved for development will be relocated to the Shopping Mall which is expected to be ready by 2015.

This year, I-Bhd will also build a budget hotel as part of its hospitality programme as a long-term investment, he said.

"By the time i-City is completed in 10 years, apart from the development profits, I-Bhd will have three million sq ft of investment properties with gross development value of RM1.5 billion that will generate recurring rental income.

"At the same time, there will also be recurring income from the leisure business," he said.

For the financial year ended Dec 31, 2011, I-Bhd recorded a revenue of RM27.2 million, up from RM9.9 million previously, while pre-tax profit was at RM1.8 million as against RM3.8 million a year before.

By Bernama