Impiana to diversify into property development


  • Property
  • Wednesday, 12 Aug 2020

Impiana said the ongoing redevelopment of Impiana Residences Cherating by its wholly-owned subsidiary, Impiana Cherating Sdn Bhd, has been identified as the group’s maiden venture into property development. (File pic - Impiana Residences Cherating.)

PETALING JAYA: Impiana Hotels Bhd plans to diversify its core business to include property development, with the aim of improving earnings and enhancing shareholders’ value.

Impiana said the ongoing redevelopment of Impiana Residences Cherating by its wholly-owned subsidiary, Impiana Cherating Sdn Bhd, has been identified as the group’s maiden venture into property development.

“The board expects the property development business to contribute 25% or more of the group’s net profit and as such, intends to seek the approval of Impiana shareholders to undertake the proposed diversification, ” it said in a filing with Bursa Malaysia,

The redevelopment of Impiana Residences Cherating is expected to be undertaken over three phases, of which the first phase commenced in October 2018 and the third phase expected to be completed in the fourth quarter of 2023.

Impiana said the diversification would complement the group’s existing businesses of management and operation of hotels and resorts, property investment and hotel development.

“This will allow the group, in particular Impiana Cherating, to operate based on an asset-light model by selling service suites to investors and leasing them back to be operated as part of the resort. Meanwhile, management rights of the hospitality asset of the resort would be kept in-house.

“This will potentially strengthen the group’s profitability and cashflow.”

Impiana said the group remained focused on carrying on its existing core businesses within the various segments of the hospitality industry.

The hotel and tourism sector has been severely impacted by the Covid-19 pandemic. For the quarter ended March 31,2020, Impiana registered a net loss of RM2.21mil on revenue of RM39.77mil.

Upon completion of the proposed diversification, Impiana said its board expected property development and its related activities to contribute positively to the group and supplement the existing business segments.

“Currently, the redevelopment of Impiana Residences Cherating, which is expected to comprise 486 service suites, 18 semi-detached villas and 42 private villas together with other amenities upon completion, has been earmarked to be the group’s maiden project under this new business model.

“The said redevelopment is expected to have an estimated gross development value of RM413.1mil over the three phases. After taking into account the gross development costs estimated at RM297.1mil, Impiana Cherating expects to generate a total pre-tax profit of RM116mil.”

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