KUALA LUMPUR: Naza TTDI Sdn Bhd, the property arm of the Naza Group plans to undertake what may be Malaysia's largest initial public offering (IPO) in 2024.
According to its chief executive officer Daniel Lim, the property company intended to list on the Main Market of Bursa Malaysia and was also considering forming a real estate investment trust (REIT).
"One of the choices is an IPO. We have alternative possibilities, such as investing in a REIT. We have a large number of assets that we can pool and invest in a REIT," he told the New Straits Times.
"Naza Group and Naza TTDI are very asset-heavy. If we can sell some of these properties to a REIT and reinvest some of the proceeds, that will be another good strategy for the group.When I first came in, we set a goal of launching an IPO in 2024. We're still on track.
"However, we don't know whether to list Naza as a group or Naza TTDI. We have assets worth RM2.5 billion as a group, with Naza TTDI contributing RM1 billion. So, if we go for listing and we talk about twice the value, we're looking at roughly RM5 billion," he added.
Lim said the IPO proceeds would be used to cover working capital, expansion ambitions, and development needs.
According to him, Naza TTDI plans to launch six new projects over the next three years, totaling RM3.5 billion in gross development value (GDV).
He said the GDV in hand was currently greater than RM2 billion.
Naza TTDI has been considering an IPO since 2008 but opted against it because the market was not in its favour.
"Previously, we were hesitant to go into an IPO because the valuation for a property company is not particularly good. In reality, the valuation may be lower than your net asset worth at times. In other words, if you go out and sell your company shares to the public, you are doing so at a loss, which is not a very idle situation.
"The market has not been very healthy in the last two years, and people are still worrying about oversupply. There have been many negative sentiments. When it comes to real estate, most investment banks are hesitant to fund. But things are getting better," Lim remarked.
He said Naza TTDI's shareholders' fund would surpass RM1 billion this year.
If the company can maintain a constant increase in net profit and revenue, it will be ready to list next year.
"Given that the company is expanding and the valuation has improved, we believe that next year will be a suitable time to launch the IPO. We intend to increase the company's revenue to RM600 million per year over the next two years, but this is entirely dependent on market conditions," he said.
Lim is cautiously hopeful about the year ahead and 2024.
He said things were looking up now, and politically, things were becoming clearer.
"The Covid-19 situation is under control. People have been saving for the last two to three years. Now that everyone has begun to relax, I believe things will begin to improve over time," he added.