“Only works on the canal component have stopped, as our partner is renegotiating the flood mitigation plan for the project with the state government; other components of the project are still ongoing.

“There is still around 2,700 acres (1,080 hectares) left to be developed in the projects,” IJM Land managing director Datuk Soam Heng Choon clarified after the launch of IJM Land’s ‘My Space Plan’ home ownership promotion here yesterday.

The current Selangor state government is believed to have asked for a more comprehensive flood mitigation plan. Total gross development value of the Canal City project is estimated at around RM10 billion.

IJM Land and Kumpulan Europlus Bhd (K-Euro) are jointly developing the Canal City project. IJM Land’s parent IJM Corporation Bhd also holds a 25% stake in K-Euro.

Soam was clarifying a report in The Edge Financial Daily that construction and related work at the Canal City project, which started towards the end of 2007, had stopped.

K-Euro had announced recently the new state government had requested changes to the original privatisation plan, including omission of the main canal and its related work.

As part of the deal inked earlier with the previous state government, the 1,960ha Canal City involves the flood mitigation project in the form of an 18km-canal linking Sungai Klang and Sungai Langat, estimated to cost around RM745 million. In return, K-Euro gets the land.

However, given that the proposed canal was being renegotiated and the revised terms and conditions were being worked out, K-Euro has said the land, already alienated to its 35% associate Canal City Construction Sdn Bhd (CCCSB), would be considered sold to CCCSB at a price to be mutually agreed upon.

Meanwhile, Soam said IJM Land still owns 3,200ha-3,600ha of landbank, including those in Canal City, and had a total potential gross development (GDV) value of RM17 billion for development spanning over 20 years.

On its ‘My Space Plan’ home promotion, he said IJM Land was targeting to rake in sales of between RM200 and RM250 million over a three month period from the campaign.

While acknowledging that property prices had softened in tandem with the slowing economy, Soam said response from buyers was still very encouraging, particularly for medium and mid-high end properties, the company’s mainstay.

Citing an example, Soam said the recent soft lanch of its Summer Place beachfront project in Penang, with an average price of RM330,000, managed to record sales of 200 units during the first day of launch earlier last month.    

It is also offering a unique buy-back guarantee for its high-end Ampersand @ Kia Peng project as part of the incentives offered under the ongoing promotion. This scheme offers buyers the option to sell back to IJM Land within three months of purchase at 95% of the property value.   

About 60% of IJM Land’s Summer Place project has been sold, while the take-up rate for Ampersand @ Kia Peng, with average selling price of RM3 million per unit, stands at 50%. IJM Land plans to launch around 10 new projects in its current financial year, offering properties worth over RM700 million.

Some of its properties included in the current nationwide promotion are The Light, Platino, and Summer Place in Penang, Seremban 2 in Negri Sembilan, Shah Alam 2, PJ8 in Petaling Jaya, Laman Baiduri in Subang Jaya, Nusa Duta and Casa Impian in Johor and Ampersand @ Kia Peng within the KLCC vacinity.

This article appeared in The Edge Financial Daily, April 2, 2009.