PUTRAJAYA: IOI Corporation Bhd, which has just proposed to demerge its property and related businesses and subsidiaries into IOI Properties Group Sdn Bhd, is expecting not less than RM1 billion operating profit from the new entity in the next three years.

Group Chairman Tan Sri Lee Shin Cheng said the profit would come not only from Malaysia but also from property businesses in Singapore and China.

In the financial year ended June 30, 2012, IOI Properties recorded an operating profit of RM506.3 million.

"We also expect earnings from Malaysia and overseas will be even by 50-50 per cent ratio in the next three years," he told a media briefing on the proposed demerger exercise here today.

The new entity will hold the property development, property investment and other property-related businesses of IOI Corporation and set to become one of the biggest listed property companies in the country with total assets of RM15 billion.

Lee said the exercise was timely, especially with the continuous bullish sentiments for property businesses not only in Malaysia but also in the region, coupled with stable economic condition.

Asked on income ratio from property development and property investment, he said, currently about 90 per cent came from property development.

"As a property developer, we can't keep on building and selling properties. Like in Singapore, the high-end apartments are quite difficult to sell, but the medium range is selling good. So, we may want to keep some properties for property investment," he said.

Lee said that in the next five years, property development would account for 60 per cent contribution, while the remaining 40 per cent would come from property investment.

He also said the current 4,070 hectares of its landbank were located in ideal locations in Malaysia and China, which make it commercially viable to be developed in the next 15 years.

The proposed demerger exercise is expected to be completed by year-end.

Meanwhile, IOI Properties Group is expected to be listed on the Main Board of Bursa Malaysia next year. -- BERNAMA