Following a slight delay in view of GE13, IGB Corp Bhd and JV partner Selia Pantai Sdn Bhd, will finally sign the RM6billion deal to develop a 14.57ha site in Plentong, Johor Bahru, reported The Star.
The Southkey Megamall project will include offices, residences and retail outlets. It has already received a development order and is now at the design stage, said company officials.
Southkey will be IGB’s maiden major project in Johor and follows the success of IGB’s Mid Valley City township. Construction is set to start by mid-2013 and end by 2018 or 2019.
The challenge, however, is to attract shoppers, particularly Singaporeans, said Robert Tan Chung Meng, Group Managing Director at IGB.
“But it is a good site. I don’t think you can find a better site than that, being five minutes from the customs, immigration and quarantine complex via the highway. Design-wise, Southkey would be an improvement over Mid Valley City because we will learn from the first one.”
Meanwhile, IGB is currently wrapping up transactions including smaller land parcels that may be used for long-term investment or niche developments.
“IGB’s strategy is to build and keep, not build to sell. Our focus is recurring income. This is why the gestation period tends to be longer. But if we come by a good piece of land, which we are evaluating, our gross development value might improve,” said Tan.
IGB’s net profit for Q1 2013 dropped 16.3 percent to RM48.06 million from RM57.44 million in Q1 2012 on the back of higher operating expenses. Despite this, revenue spiked to RM243.01 million, up nine percent from RM222.89 million, buoyed by contribution from hotel and property investments.