IJM Land in UK venture (5215)

PETALING JAYA: IJM Land Bhd is venturing into the United Kingdom via a joint venture to build a five-star hotel and residential apartments that will have a gross development value (GDV) of £280mil (RM1.4bil).

The company told Bursa Malaysia yesterday it had entered into a shareholders' agreement with Lite Bell Consolidated Sdn Bhd to form a joint-venture company, Mintle Ltd, in Jersey to acquire a 999-year lease over a 2.7 acre site with detailed planning consent for about 650,000-sq-ft space.

The site is predominantly situated above the National Rail and DLR railway lines adjacent to the Royal Mint Street in central London.

Mintle also acquired one share of £1 each in dormant company RMS (England) Ltd for £1. RMS England and Mintle would undertake a mixed-use development on the property.

Network Rail Infrastructure Ltd is the freehold owner of the property and granted ZBV (RMS) Ltd an option to acquire the lease of the property.

The working capital to be funded by the company to develop the property would be between £25mil and £30mil.

“The joint venture is part of a strategic move by the group to expand its property development footprint beyond Malaysia and is in line with its long-term vision of being an internationally admired property developer,” it said.

IJM Land added that the current favourable exchange rate regime and the lack of funding opportunity for property developers in London due to the eurozone crisis provided a window of opportunity to venture into the mature and international central London property scene.

“The company's ability to attract a number of buyers from the Asian region, who are one of the biggest groups of property investors in London in recent times, also augurs well for the project,” it said.

IJM Land said the project, when completed, would have “excellent views of the popular London landmarks such as Tower of London, Tower Bridge, Royal Mint Court, St. Katharine's Docks and River Thames.”

It said the project, granted detailed planning consent in April 2012, comprised one block of 5-star hotel-cum-residential apartments and three blocks of residential apartments with a total gross built-up area of 650,000 sq ft.

“The gross development value of the project is expected to be around £280mil. The cost will be funded via a combination of borrowings and internal funds, the details of which have yet to be determined,” it said.