i-City to earn more from properties

Eu with a model of i-City project.

SHAH ALAM: I-Bhd, the developer of i-City, expects to see its property development segment accounting for 50% of its net profit in two to three years.

“The bulk of it will still be from property development. As for the leisure, we see a contribution of 30% to our net profits in two to three years' time, while the balance will be from the property investment segment,” group chief executive officer Datuk Eu Hong Chew said.

The leisure business posted 43% to profit margin last year. Since the launch of i-City's “City of Digital Lights,” revenue from the segment has grown from RM2.8mil in 2010 to RM17mil last year.

i-City will be investing another RM25mil to build a children's gym and a water theme park. The 10,000 sq ft gym will be opened in August 2012 while the 4-acre water theme park will be opened in November.

Upcoming developments in i-City include the one million-sq-ft shopping mall known as CityMall. The mall will be built on a 14-acre lot and will comprise a five-storey podium block and four towers for a hotel and three serviced residences. The gross development cost, which is the total cost incurred from initiation to implementation is between RM600mil and RM700mil.

Eu said the company was currently looking for a joint-venture (JV) partner with shopping mall development expertise to help build and manage the mall.

“We expect to have a minority stake of between 30% and 40%. We will let the experts manage it. The mall will be funded by the partner,” he said.

He added I-Bhd had not signed any deals for the development of the mall. However, he expects the construction for the mall to start before year-end. “We are in the building plan stage now, and expect the mall to be complete in 2015,” Eu said.

CityMall will be the only other mall to have direct access from the Federal Highway apart from Mid Valley Megamall.

A direct flyover from the Federal Highway costing RM58mil is currently under construction and will be completed in September. The project was undertaken by the Mentri Besar Inc to ease traffic flow to and from the area.

By The Star