Ioi Properties Group Berhad

IOIProp Likely to List REIT in 2H26

IOI Properties Group Bhd (IOIProp) may list its real estate investment trust (REIT) in the second half of financial year 2026 (2H26) since it needs to ease its debt level.
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UOB Kay Hian (UOBKH) Research said the group which has been on an acquisition trail since its financial year 2024 (FY24), has lifted net gearing to 0.75 times as of the end of its second quarter of FY25.
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“To manage gearing position, IOIProp has accelerated cash-generating strategies such as industrial land monetisation and the clearance of completed inventories.
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“The company has recently selected the adviser for the proposed REIT listing, with a potential asset size of RM6bil to RM8bil including IOI City Mall Phases 1 & 2, hotels and office assets in Malaysia.
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“This will be part of its deleveraging strategy,” UOBKH Research added.
The research house expects further growth in property investment income in 2H25. This will likely be led by the inclusion of new IOI Mall Damansara and rising occupancy at the IOI Central Boulevard Towers (IOICB).
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“As of end-March 2025, IOICB’s tenant commitment rate has reached 80% (versus 75% as of end-January 2025), though actual occupancy remains at 50%.

“With interest rate estimated 3.8%, profit breakeven is likely at 70% to 75% occupancy rate, which we believe is achievable by FY26,” it said.
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“Meanwhile, in Malaysia, a turnaround for IOI Mall Damansara is likely in FY26, underpinned by ongoing asset enhancement initiatives, including tenant reconfigurations, relocations, and increased marketing efforts,” it added.
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This may result in an anticipated improvement in footfall which should support a rental catch-up, as it is now asking for a below-market rental rate of RM5 per sq ft.
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Meanwhile, UOBKH Research expects IOIProp to achieve its FY25 sales target of RM2bil, supported by new property launches, continuous efforts in clearing completed inventories and the finalisation of industrial sales.
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The company had received two letters of intent on land purchase back in November 2024, and UOBKH Research said the group targets to sign one land deal by June this year. It estimates this deal could potentially generate a sale of RM500mil.
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Its upcoming W Residences – Marina View project launch is slated for an end-April 25 launch.
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“While the residential project’s average selling price is guided at S$5,000 per sq ft, we gather that the initial launch price has been priced at S$3,500 per sq ft to test the market, with step-ups in subsequent phases,” it said.
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Even if there are market concerns over the take-up rate amid macroeconomic uncertainty linked to global tariffs, UOBKH Research said it believes the pricing strategy could attract early buyers which may drive initial uptake.
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“IOIProp continues to guide for a 30% take-up rate within the first year of launch,” it noted.
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It maintained its “buy” call with a lower target price of RM2.54 from RM2.83, based on a 50% revised net asset value of RM5.07 from a previous discount of 45% to reflect higher risk premiums.
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It implies a FY25 to FY27 forecast price to book ratio of 0.5 times, largely in line with a 10-year historical mean of 0.5 times.

$IOICORP / 1961 (IOI CORPORATION BERHAD)
$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)

Source from The Star
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🇲🇾🇸🇬JS-SEZ: Unlocking High Value Growth And Fostering Win-Win Cross-Border Prosperity

• The much anticipated joint agreement to establish JS-SEZ has been formalised by both leaders of MY and SG following the 11th Malaysia-Singapore Leader’s Retreat today.

• Touted as the first-ever cross-country economic zone, JS-SEZ underscores both Malaysia and Singapore’s commitment to unlock high value growth and fostering win-win cross border prosperity

• The JS-SEZ rides on Singapore’s offering as a robust MNC business hub, and Johor to complement with competitive cost of doing business – with abundant supply of land, labour costs and favourable tax regime.

• Envisioned to be a successful industrialisation zone, JS-SEZ is expected to be >4x larger than Singapore and nearly twice the size of China’s Shenzhen. Meanwhile, 16 economic sectors have been proposed to be part of the zone which includes the new priority sectors i.e. Aerospace, EE&E, Chemical, Medical devices and Pharmaceuticals.

• This will be carried out at 9 flagship zones spanning JB City Centre, Iskandar Puteri, Tg. Pelepas - Tg Bin, Pasir Gudang, Senai – Skudai, Sedenak with 3 new flagship zones i.e. Forest City, PIPC and Desaru. Property summary to ensue with more details on these areas.

• In expediting approvals and streamlining processes, Invest Malaysia Facilitation Centre – Johor, will be establish to act as an one-stop centre in facilitating investments.

✅ Key Measures Proposed

• Pro-business policies and incentives including special tax breaks, grants and streamlined regulations.

• Special corporate tax rates will be offered to companies undertaking new investments in high-growth and high-value-added activities within JSSEZ. A special personal income tax rate will be announced at a later date. It is understood that the MOF is looking to revamp the tax structure to be more outcome-based, closely tied to the investments companies bring to the table.

• Foreign investor-friendly policies including robust IP laws and allowing 100% foreign equity in selected service sectors such as healthcare, social services, tourism, transport, business, and IT.

• Reduced friction from cross-border travel and trade via automated immigration lanes and paperless clearance for goods

• Enhanced immigration passes with Malaysia’s existing visas to be enhanced similar to the DE Rantau Nomad Pass

• Support from the MY Gov for the development of the JS-SEZ via a new infrastructure fund to support power, water, roads, electricity, gas and to some extent, land (It was mentioned that land falls under the jurisdiction of the state govt)

• Funding support from the SG Gov to facilitate the expansion of SG companies into the JS-SEZ and potential twinning of MNC operations in Singapore and the SEZ

• Targeting 50 high-value projects and 20,000 high-skill jobs created over the next 5 years

• The first wave will target global companies managing geopolitical risks, advanced E&E industries, data centers, Pengerang-related projects, tourism, and green electricity initiatives.

• A streamlined pathway will be available for investors to access green electricity. Instead of waiting for quotas, they can work directly with Genco TNB to secure green electricity through the CRESS program.

🚰 Impact/Beneficiaries

• Utilities: Corporate Renewable Energy Supply Scheme (CRESS) should benefit all solar players (Pekat, Malakoff, Solarvest, Samaiden), YTLP, TNB

• O&G: Dialog, beneficiary not only via its position in Pengerang, also plus its position in Tanjung Langsat

• Construction: JS-SEZ and updates on the proposed KL-SG HSR shall benefit mid-large cap construction stocks like Suncon, Gamuda, IJM, YTL

• RTS/ART: Public transport improvements in Johor are not part of the JSSEZ initiative and remain pending a decision from the federal government. We gather that negotiations for the Johor LRT/ART are ongoing, with no final decision yet. Developers involved with RTS currently are Suncon, IJM, Gadang, Econbhd. So further rail network developments may benefit these names with track records.

• Property: Developers with landbank under the JS-SEZ flagship zones are UEMS, IOIPG, Mah Sing, SP Setia, ECW, Lagenda, Sunway Bhd (refer to table).

• Technology: While details remain limited, the potential lies in attracting IC designers, OSAT providers, and EMS players. This is expected to follow the establishment of facilities by MNCs, paving the way for a robust technology ecosystem.

$UEMS / 5148 (UEM SUNRISE BERHAD)
$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$SPSETIA / 8664 (S P SETIA BERHAD)

TA SECURITIES TOP PICKS 2025

Shifting Into High Gear.

This year has laid a strong foundation for economic recovery, setting the stage for continued growth in 2025,
which should positively impact the equity market. Key factors underpinning a positive outlook for equities include: 1) A stronger domestic economy and improving fundamentals, supported by a resilient global economy, 2) Increased foreign and domestic investments, 3) Structural reforms backed by a strong government, boosting the country’s finances and investor confidence, 4) Continuous growth in corporate earnings, supporting expansion in valuation multiples, and 5) A net inflow of foreign funds. However, we anticipate several downside risks that could undermine investor confidence next year: 1) Geopolitical tensions, 2) Trade wars, and 3) Deflationary pressures in China. There could be some volatility in the local equity
market during the early periods of Donald Trump’s second presidency, but in our view, Malaysia has its own merits in remaining resilient and eventually emerging stronger. Our 2025 FBMKLCI target is 1,845, based on a CY26 PER of 15.5x, still undemanding compared to its 5-year (2020-2024) average of 17.0x.

Maintaining our cautiously optimistic outlook on local equities and anticipating a potential 15.5% upside for the FBMKLCI, we recommend the following key investment themes for 2025:
1) Growth Stocks (BNASTRA & PGF): Focus on agile small cap players poised to seize opportunities and deliver strong earnings growth.
2) Disruptive Technologies and Digital Economy (INARI. TM & YTLPOWR): Significant investments in the E&E sector, data centres, and related infrastructure will drive this theme.
3) Domestic Spending and Resilient Economy (AEON,FFB, FOCUSP, GAMUDA, SUNCON, MAHSING, IOIPG, SIMEPROP, CIMB, MAYBANK & PBBANK): Benefiting from a strong labour market, higher disposable income, improving tourism and related industries, robust investments, greater capital market activities and the largestever allocation under Budget 2025.
4) Energy Transition (SAMAIDEN & TENAGA): Aligning with sustainable development goals.
5) Stronger Ringgit (ASTRO & LHI): Favouring companies with high domestic business and import content.

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$POLY / 8117 (POLY GLASS FIBRE (M) BERHAD)
$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research Report by HLIB

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by HLIB

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research Report by TA

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research Report by RHB

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research Report by HLIB

PUCHONG: IOI Properties Group Bhd (IOIPG) has unveiled the IOI Rio City masterplan, a 40.46-hectare (100-acre) integrated development valued at RM12 billion over 12 years.

Titan Trading Notes For Monday [28/10/2024]:

$KLCI retraced back towards the 1618 points region with an overall negative market sentiment as we still saw over 650 counters closing red along with it during last Friday. Daily trading volume remains low around the 2.4 billion mark, whish isn't a good sight.

Main stocks that showed strong buying momentum would be the likes of IOIPG, NATGATE, ELRIDGE, YEWLEE, SDCG, and IHH. All of which were able to sustain their rallies throughout the day on the top volumes list despite the weak market.

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) since retracing back towards the RM 2.20+ main support levels last week, had been able to rebound strong back towards the RM 2.30+ regions with good volume and buying momentum during last Friday.

So far looking quite strong here and as long as able to sustain this kind of buying momentum, could trend back up towards the RM 2.40++ regions soon in the coming weeks for an uptrend continuation pattern.

Will be monitoring IOIPG closely here as seems to be trending up strong.

$NATGATE / 0270 (NATIONGATE HOLDINGS BERHAD) on the other hand since breaking out from its RM 1.90+ major resistance levels last week, had been able to hold well above that level and rallied all the way towards the RM 2++ regions with huge volume and buying momentum.

So far looking quite ripe for a potential uptrend continuation pattern here towards the RM 2.20+ regions. As long as able to hold above its RM 1.90 support, could continue on this breakout.

Will be monitoring NATGATE closely.

Although the property sector had been slowing down, $MAHSING / 8583 (MAH SING GROUP BERHAD) ad been recovering quite well over the past few weeks, breaking out towards the RM 1.84 regions on Friday with good volume and buying momentum.

So far seems to have formed its higher low regions already with RM 1.72+ as the main support levels on the daily chart. For now as long as able to sustain, could trend back up towards the RM 1.97 major resistance levels soon.

Will be monitoring MAHSING closely here as seems to be recovering quite well.

Titan Trading Notes For Thursday [17/10/2024]:

$KLCI retraced back towards the 1632 points region with an overall negative market sentiment as we still saw 700 counters closing red along with it for the day. Daily trading volume remained average around the 2.7 billion mark, mainly dominated by selling activities.

Main stocks that showed strong buying momentum would be the likes of CAPITALA, GENM, MRDIY, IOIPG, and LHI. All of which were able to sustain their rallies throughout the day on the top volumes list despite the weak market sentiment.

CAPITALA had a huge breakout towards the RM 0.97+ regions with huge volume and buying momentum today despite the weak market sentiment. Although it still faced selling pressure around the RM 0.97 regions, its closing price of RM 0.955+ was still quite bullish here.

So far seems to be looking quite ripe for a potential uptrend continuation pattern here and as long as able to hold above its RM 0.94+ immediate support levels, could continue to trend back up towards the RM 1+ regions soon.

Will be monitoring CAPITALA closely here as seems to be quite strong.

Although the overall property index was down for the day, $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) was able to breakout strong towards the RM 2.42 regions today with huge volume and buying momentum despite being oversold here on the daily chart and the weak market sentiment.

So far looking quite strong here and as long as able to sustain above its RM 2.20+ immediate support levels, could continue on towards and beyond the RM 2.50 major resistance levels soon for an uptrend continuation pattern.

Will be monitoring IOIPG here as still looking very strong for the property sector.

$VLB / 0273 (VESTLAND BERHAD) although retraced back towards the RM 0.51 main support levels earlier this week, had been able to rebound strong today back towards the RM 0.54 regions with good volume and buying momentum.

So far looking quite ripe for a potential bullish continuation pattern here. As long as able to hold above its RM 0.52+ immediate support levels, could continue to trend back up towards the RM 0.595 all time high zones soon.

The luxury residential market in Singapore is heating up, boding well for IOI Properties Group Bhd (IOIProp), which is scheduled to launch its ultra-luxury Marina View Residences before the end of the year, says Hong Leong Investment Bank (HLIB) Research.

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by HLIB

KUALA LUMPUR: The red hot office market in Singapore means that IOI Properties Group Bhd’s IOI Central Boulevard (IOICB) office building in Singapore could be worth RM21 billion (S$6.45 billion) at current valuations, Hong Leong Investment Bank Research said.

© New Straits Times Press (M) Bhd

IOI Properties Group Bhd (IOIProp) plans to launch over RM5bil worth of properties in the financial year ending June 30, 2025 (FY25), surpassing FY24’s RM4.49bil of residential, commercial and industrial product launches.

TA INVEST TOP PICKS Q4 2024...

Investment Strategy – Buy on Weakness. Savings from government subsidy rationalisation, multi-billion public spending on infrastructures, foreign direct investments and domestic direct investments in renewable energy and growth sectors identified under the long-term plans are catalysts for domestic sectors. Thus, our top picks are closely associated with the Banking, Construction, Consumer, Healthcare, Power, Property and Telco sectors. The strong growth in the E&E exports driven by the “China Plus One” strategy and demand for advanced technologies, electric vehicles, data centres, etc., are expected to sustain interest in the Technology sector while benefitting Power and Telco players as well.

$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD) $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $POLY / 8117 (POLY GLASS FIBRE (M) BERHAD) $FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD) $SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD)

HLIB TOP PICKS Q4 2024

Rejuvenation of domestic fundamentals. Our positive stance on Malaysian equities goes beyond the Fed’s rate down cycle as the country is seeing rejuvenated domestic fundamentals with GDP growth picking up, record approved investments and subsidy reforms in motion, alongside a more stable political landscape. We remain upbeat on the following themes that we had earlier introduced for 2024: (i) continued robust tourism recovery, (ii) energy transition under NETR, (iii) Johor’s developmental reinvigoration, (iv) disposable income boosting measures from EPF Account 3 and civil servants pay hike and (v) trade diversion and proliferation of the China+1 strategy from the US-China trade war.

$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD) $AIRASIA / 5099 (AIRASIA GROUP BERHAD) $SMRT / 0117 (SMRT HOLDINGS BERHAD) $MNHLDG / 0245 (MN HOLDINGS BERHAD) $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by HLIB
BUY – TPRM3.90

" Interest cost savings from Fed rate cuts ”

The recent 50 bps rate cut by the FOMC augurs well for IOIPG, given that it has 82% of its debt denominated in SGD, mostly at floating rates. Note that Singapore interest rates tend to move in tandem with US interest rates. A 50 bps reduction in interest rate could translate to an annual interest saving of SGD22.5m (RM74.4m). Further savings are expected when more rate cuts materialize. While we anticipate further debt drawdown for Marina View and cash outlay for acquisition of Tropicana Gardens Mall, we nonetheless think that net gearing should remain at current level of 70% or trend lower, supported by a stronger ringgit and potential revaluation gain in end-FY25. Maintain forecasts and our conviction BUY call with a higher TP of RM3.90 (from RM3.60) based on a lower 35% discount (from 40%) to our estimated RNAV of RM6.00.

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by RHB
Neutral– TP RM 2.15

"Hit By High Depreciation Of Hotel Assets”

Maintain NEUTRAL with a lower MYR2.15 TP from MYR2.40, 10% upside and 3% yield. IOI Properties’ 4QFY24 (Jun) results were below expectations. Core earnings were hit by further write-down in the Xiang An project, as well as increased depreciation and write-off of certain hotel assets. Although the company no longer pursues the acquisition of Shenton House, we are cautious with the potential impact on gearing and interest expense given the commencement of Marina View development by year end and the operations of Central Boulevard from FY25.

Analyst:
Loong Kok Wen CFA
loong.kok.wen@rhbgroup.com

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by HLIB
BUY – TP RM3.60

"Positive developments despite earnings miss”

IOIPG reported strong headline FY24 profit of RM2.06bn boosted by the revaluation gain of its investment property assets. Nonetheless, its FY24 core PATAMI of RM638.1m (-0.4% YoY) was below expectations due to weaker JV performance and lower China sales. The group reported solid sales, exceeding its target, and saw a decline in net gearing. Separately, IOIPG entered into a management agreement for Shenton House, securing management fees and a first right of refusal for future acquisition – addressing potential conflict of interest and reducing financial risk. We cut our FY24/25 forecasts by -5%/-1.4% as we impute lower contribution from IOICB. Maintain our conviction BUY call with an unchanged TP of RM3.60 based on 40% discount to our estimated RNAV of RM6.00

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by TA
Buy – TP RM3.02

"FY24 Wraps Up Softer-than-Expected”

We maintain our Buy recommendation on IOIPG with a revised target price of RM3.02/share (previously RM3.10/share). Our valuation is based on P/Bk multiple of 0.65x against its CY25 BPS, slightly below the stock’s peak valuation of 0.71x since its listing in 2013 and a 3% ESG premium incorporated into our TP.

Analyst:
Thiam Chiann Wen
cwthiam@ta.com.my

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by MIDF
NEUTRAL – TP RM2.04

"Keeping abreast of market demand”

• FY24 earnings below expectations
• Weaker earnings in FY24
• FY24 new sales at RM2.14b
• Shenton 101 proposal not accepted
• Earnings forecast revised downwards
• Maintain NEUTRAL with a revised TP of RM2.04

Analyst:
Jessica Low Jze Tieng
jessica.low@midf.com.my

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$TROP / 5401 (TROPICANA CORPORATION BERHAD)

$SPSETIA / 8664 (S P SETIA BERHAD) $SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD) $UEMS / 5148 (UEM SUNRISE BERHAD) $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $KSL / 5038 (KSL HOLDINGS BERHAD)

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Research by HLIB
Buy - TP RM3.60

"A new chapter of growth"

IOI Central Boulevard began operations after receiving its temporary occupa tion permit for Phase 1 in Apr, with Phase 3 expected in Sep. Initial revenue is anticipated from 4QFY24, and interest costs are likely to be expensed post-Phase 3. With SGD3bn in floating-rate debt for IOICB, it should benefit from expected Fed rate cuts. Marina View Residences with a GDV of SGD3.5bn will launch soon, with groundwork construction already underway. The rejuvenation of Singapore CBD should benefit IOIPG’s key developments along Shenton Way. Maintain our conviction BUY call with a higher TP of RM3.60 (from RM3.30) based on 40% discount to our estimated RNAV of RM6.00.

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $UEMS / 5148 (UEM SUNRISE BERHAD) $SUNWAY / 5211 (SUNWAY BERHAD) $SPSETIA / 8664 (S P SETIA BERHAD) $KSL / 5038 (KSL HOLDINGS BERHAD)

$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD)
$SUNWAY / 5211 (SUNWAY BERHAD)
$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$YTL / 4677 (YTL CORPORATION BERHAD)
$GAMUDA / 5398 (GAMUDA BERHAD)
...

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
Slipped to RM1.85 today. When can it reach my target of RM1.65?

More REITs on the Horizon?

The market is abuzz with news that $WCT / 9679 (WCT HOLDINGS BERHAD) is planning to establish and list a REIT, an opportunity that could unlock significant value for the company and marks a long-awaited retail REIT listing. Although specific details have not yet been released, investor excitement is palpable. Other companies might also pursue REITs to unlock their value in the future. Here are a few that could be planning REIT listings:

1. $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD): Recent acquisition activity suggests that IOI Properties intends to establish a REIT. In this post (https://cutt.ly/9ezktjtw), I have detailed the assets the company owns, which you can refer to for more information.

2. $IJM / 3336 (IJM CORPORATION BERHAD): In 2023, IJM Land's COO revealed plans to establish a REIT in the future. Currently, IJM does not meet Bursa's requirements to establish a REIT. There is also market speculation that IJM might list its highway assets as a REIT or Business Trust in the future.

3. $SPSETIA / 8664 (S P SETIA BERHAD): SP Setia's CEO recently revealed that the company is considering establishing a REIT to diversify its asset portfolio, potentially including retail complexes, office buildings, schools, and a convention center. Some of the key properties currently owned by SP Setia are Setia City Mall in Setia Alam, the INC Mall (formerly known as KL Eco City Mall) in Kuala Lumpur, Setia City Convention Centre in Shah Alam, Setia Spice Convention Centre in Penang, and the Amari Kuala Lumpur hotel in the KL Eco City township.

Are there any other companies potentially seeking REIT listings that I haven't mentioned? Feel free to share additional information.