I-BERHAD, the master developer of i-City in Shah Alam, will develop Grand i-Residence, its first luxury project worth RM820 million, at the vicinity of Kuala Lumpur City Centre (KLCC).
The 50-storey tower comprises 442 fully-furnished residential units with an average selling price of RM2,300 per square feet.
I-Berhad expects the project to commence works in the middle of next year and completed in five years.
The tower will be developed on a 0.4ha plot in Jalan Changkat Kia Peng.
I-Berhad's subsidiary, I-Marcom Sdn Bhd, is in the process of buying the land from Sumuracres Sdn Bhd for RM132 million.
Sumuracres is a unit of Sumurwang Properties Sdn Bhd, which in turn is wholly-owned by Sumurwang Sdn Bhd, in which Tan Sri Lim Kim Hong, the founder of I-Berhad, is a substantial shareholder.
In a statement issued yesterday, I-Berhad said it plans to settle the RM132 million purchase price by issuing Redeemable Convertible Unsecured Loan Stocks (RCULS).
The RCULS will have five years' tenure with an average coupon rate (equivalent to interest) of 3.4 per cent per annum. It can be converted to I-Berhad ordinary shares at RM3.20 per share, representing a 15 per cent premium to the past five days' volume weighted average market price.
The RCULS scheme enables I-Berhad to buy the land without incurring significant cash outflow on the onset, the company said.
"With the i-City development forming the foundation of I-Berhad's property development activities, the proposed acquisition will see the company grow and expand its property development portfolio beyond Selangor," it said in a filing to the stock exchange.
I-Berhad's deputy chairman Datuk Eu Hong Chew said Grand i-Residence will fill the gap in the KLCC area where most of the current developments are for much larger units.
Eu is upbeat on the project and expects it to contribute to I-Berhad's bottom line from next year.
"Grand i-Residence is a testimony that we are not resting on our laurels. Although our i-City project will be able to contribute to I-Berhad's property development pipeline till 2020, we have started to plan the next phase of our property development growth," Eu said.