A recovery in IJM's UK portfolio adds momentum to the group's plan to list its construction arm and unlock shareholder value.

Kenanga Research and CGS International have both flagged a turnaround in IJM Corp Bhd's UK property investments, as the group reportedly prepares to list its construction business by the end of 2027.

IJM Corp Bhd, headquartered in Petaling Jaya, Malaysia, is a diversified construction, property and infrastructure group whose UK division has shifted toward low-risk, high-occupancy assets, including 25 Finsbury Circus in London, let to an international law firm on a 20-year lease, and the over-railway Royal Mint Gardens scheme.

JRL Group, the Hertfordshire-based contractor in which IJM holds a 50% stake, has returned to a £2.9mil (€3.4mil) pre-tax profit with a £2bil (€2.34bil) order book, targeting £50mil (€58.5mil) annual earnings as IJM's initial £50mil (€58.5mil) investment is repaid by 2028.

IJM's Innova joint venture with Network Rail splits planning costs equally and grants first-right access to under-used railway sites, reducing upfront land costs for IJM's expansion into UK student housing and build-to-rent.

Separately, IJM is reported to be targeting a RM5bil (€1.08bil) valuation for a Malaysia and Singapore construction listing by end-2027, retaining a 70% stake.

Advisors: None mentioned.

The turnaround validates a deliberate shift from speculative UK development to income-backed assets, precisely the profile needed to support valuation ahead of a public listing.

The structural driver is the Network Rail land-access model, under which shared planning costs give IJM access to prime zone-one and zone-two sites without the capital outlay that typically slows UK development.

For IJM, the JRL recovery and Finsbury Circus lease de-risk the UK book as the group pursues its RM3bil (€645mil) value-unlocking programme, including toll road monetisation and an Indian exit.

CGS International cautioned that the RM5bil target is "optimistic," noting revenue would need to double to RM7.2bil (€1.55bil) by FY28 at an 18-times earnings multiple, a bar tied to Malaysia's data centre and semiconductor-linked construction demand, now in what Kenanga Investment Bank calls a second growth wave.

Both research houses stayed constructive: Kenanga backs an outperform call with a RM3.35 (€0.72) target price, while CGSI reiterated add with RM3.20 (€0.69).

For the sector, the verdict is direct: joint-venture land-access models and income-generating strategies are becoming the template for de-risking overseas expansion and unlocking capital ahead of a listing.

Source: The Star / w.media