IJM Corp may cut stake in property unit to 60pc
Posted on | September 15, 2008
By BUSINESS TIMES
IJM Corp Bhd may reduce its stake in its property unit IJM Land Bhd to 60 per cent to boost trading in its stock and diversify its shareholding base.
It now holds 76 per cent of IJM Land.
“At some point, when the market improves, we will place some of the shares preferably to institutional shareholders. It can be anybody,” IJM group managing director Datuk Krishnan Tan Boon Seng said.
He was speaking at the launch of IJM Land’s new corporate identity and logo in Subang, Selangor, yesterday. He is also IJM Land chairman.
IJM Land, the fourth largest listed developer in terms of assets valued at RM3.1 billion, is the result of a merger between IJM’s property units, RB Land Bhd and IJM Properties Sdn Bhd.
It currently sits on an enlarged landbank of 4,253ha with a gross development value (GDV) of more than RM20 billion that will be realised over 20 years.
As for IJM, Tan expects a better performance in the current financial year ending March 31 2009, led by IJM Land, which has 60 on-going projects.
From now to March 2009, IJM Land will also launch 28 projects worth RM600 million.
“Profit margins in property are generally higher than in construction. As cost escalates, construction earnings will likely be affected. Although we are making money, we are making less,” Tan said.
In terms of revenue, Tan said the construction division, with over RM5 billion worth of contracts in hand, will remain the highest contributor.
IJM Land managing director Datuk Soam Heng Choon, meanwhile, told reporters it will replicate what it has done in Malaysia, in China.
It is due to launch its maiden residential and retail project in China’s automotive city, Changchun, which will boast a GDV of RM500 million.
“We are in talks with locals to tap China’s second-tier cities but the priority is to get all the projects in Malaysia kick-started,” Soam said.
Soam said IJM Land is also talking to a few parties for an en-bloc sale of properties in some new commercial and residential developments coming up soon in Kuala Lumpur and other states.
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