Southkey Megamall maybe injected into IGB REIT

The upcoming Southkey Megamall in Johor Baru is expected to be injected into newly public-listed IGB Real Estate Investment Trust (IGB REIT).

The Mid Valley City-type mixed development is a joint venture between IGB REIT's sponsor, IGB Corporation Bhd and Selia Pantai Sdn Bhd. The project is expected to be completed in the next five years with a tentative gross development value of between RM6 billion and RM8 billion.

"IGB Corp has yet to receive approvals from the local authorities in Johor, but they have been very supportive of the project. If everything goes as planned, work on the new mall should start in the first half of next year," said IGB REIT chief executive Antony P. Barragry after its listing ceremony yesterday.

Barragry said after the Southkey Megamall is completed, IGB Corp will operate the business for some time before putting it into the REIT.

"The project will be greater than Mid Valley City as the potential brought through the rapid development of Iskandar Malaysia is enormous," he said.

IGB REIT made its debut on the Main Market of Bursa Malaysia yesterday with some 1.92 million shares traded at an opening price of RM1.37, a premium of 12 sen over its offer price of RM1.25.

Its share price closed at RM1.39 yesterday, up 11.2 per cent with 2,361,610 shares transacted

IGB REIT raised about RM780 million, making it the country's fourth-largest flotation this year, behind palm oil firm Felda Global Ventures Holdings in June, IHH Healthcare in July, and pay-TV company Astro Malaysia Holdings which is due to list in October.

Barragry said the listing of IGB REIT will provide investors exposure to a highly attractive initial portfolio, comprising two connected super-regional malls, Mid Valley and the Gardens Mall.

"We are committed to enhancing unitholders' return and value through the organic growth of our existing portfolio as well as potential acquisition of additional suitable retail properties," he said.

By Business Times