IJM Corp restructures property, infrastructure businesses to boost market value

PETALING JAYA: IJM Corp Bhd is restructuring its property and infrastructure businesses to reduce complexity and transition towards a "pure play" model, in a move aimed at achieving clearer market valuation.

Chief executive officer and managing director Datuk Lee Chun Fai said the group is shifting away from an asset-heavy, multi-year development model towards investment properties and faster-turnaround pocket developments.

"Our property division is transitioning from long-gestation land banks to investment properties that generate more direct returns," Lee said during a media briefing on the conditional voluntary takeover offer involving Sunway Bhd and IJM.

He said the move is intended to simplify the group's structure and help the market better recognise the value of its individual businesses.

"At the moment, everything sits in one big basket. You have asset-heavy businesses, earnings businesses, young assets, mature assets and projects under construction across different markets. To bridge the valuation gap, we need to simplify the structure and move towards clearer pure-play businesses," he said.

Lee explained that township developments typically involve long gestation periods, citing Seremban II as an example.

"Developments like Seremban II started in the 1990s, and we are still developing there today," he said.

IJM is now focused on smaller pocket developments and investment properties that can deliver quicker returns while maintaining its development pipeline.

Lee noted that IJM's construction division remains a strong performer, supported by an order book of nearly RM8 billion.

However, he said the segment's performance is often diluted when viewed within the broader group structure.

At the same time, the group is repositioning its property strategy by shifting from a land bank-heavy model towards holding more income-generating assets.

Lee said the strategy will allow IJM to accelerate value creation while maintaining a long runway for development.

The group currently holds land banks with a gross development value exceeding RM30 billion, while property sales average about RM2 billion annually.

He added that IJM also has about RM1.5 billion in valuation uplift embedded within its land bank portfolio, reflecting asset value that has yet to be fully realised.

Meanwhile, IJM is reviewing certain overseas operations as part of its broader restructuring strategy.

Lee said the group is moving towards exiting its operations in India across the construction, property and toll road segments.

The plan could involve monetising toll and property assets in the market, allowing IJM to redeploy capital into higher-growth opportunities within its core markets.

"Our goal is to unlock value faster. Mature assets such as toll roads and investment properties can be monetised earlier to reflect their true worth," he said.

Lee emphasised that the company is not abandoning its long-term asset-building strategy but is adapting to changing investor expectations.

He noted that IJM has historically created value through long-term asset development cycles.

"In the past, building value could take decades, like plantation assets which took more than 20 years to mature. Today, shareholders expect value to be unlocked faster. This strategy allows us to balance long-term asset creation with shorter-term monetisation, ensuring shareholders can realise value earlier rather than waiting decades," said Lee.