Penang-based property player Ideal United Bintang Bhd (IUBB) plans to stick to affordable housing projects in the next two years, given the slowdown in the economy and property sector in the country.

IUBB’s executive chairman Datuk Alex Ooi Kee Liang said at present, the group will be concentrating on its maiden development, the I-Santorini located at Tanjung Pinang, Penang.

“The I-Santorini is an affordable housing development that consists of 2,155 residential units, as well as shop offices, with a price range of between RM300,000 to RM500,000 per unit. The total gross development value for the project is approximately RM900 million,” he told reporters, after the group’s extraordinary general meeting (EGM) today.

Property development is not unchartered waters for Ooi. His private vehicle Ideal Property Group is a renowned developer in Penang, with properties such as the Imperial Residences and the Solaria Residences in Bayan Lepas under its belt.

Ooi took over the reigns of heavy machinery importer and exporter United Bintang Bhd in October 2013, and subsequently in April 2014, the group announced that United Bintang was diversifying into the property development business. The group then changed its name to Ideal United Bintang in May 2014.

“At present, the undeveloped landbank for the Ideal Property Group in total is 250 acres, which we intend to develop over the course of the next 10 years. We will also look into developing more affordable housing projects and injecting these projects into IUBB,” he said.

He added that while I-Santorini would be the focus of IUBB at this juncture, the group is also looking at more affordable developments in the Bayan Lepas and Green Lane areas in Penang.

“We intend to allocate 75 acres or 30% of our 250 acre undeveloped landbank for affordable housing projects. This includes the allocation for the I-Santorini project,” said Ooi.

Besides its affordable housing development, the group will also be working on the renovation of 22 floors of the 26-floor Menara LA (previously known as Menara Liang Court) located on Jalan Sultan Ahmad Shah, Penang, and subsequently sell its floors by the first quarter of next year.

IUBB shareholders gave their approval for the group to acquire 10 floors of the building for RM15.04 million in November last year. At its EGM today, the group’s shareholders approved the acquisition of another 12 floors for RM19.5 million. The remaining floors of the building not owned or being acquired by IUBB are owned and occupied by AmMetLife Insurance Bhd.

“One of the interested buyers is a local, while the other is from Singapore. IUBB’s intention is to renovate the floors that we own and sell it. Two floors will be reserved for commercial use. The rest, we intend to convert into a hotel, somewhat like a three-four star express hotel concept, depending on the buyer’s specification.

“As for the selling price, that would again depend on the specification from the buyer [on the magnitude of renovations required],” he said.

IUBB shares closed unchanged at 92 sen today, for a market capitalisation of RM64.94 million.

Source: TheEdgeMarkets.com