PETALING JAYA: IOI Properties Group Bhd
(IOIProp) is expected to sustain a positive outlook underpinned by the expansion of its industrial portfolio.
The group is undertaking a major expansion of its industrial property portfolio, with key projects in Banting, Selangor; Iskandar Malaysia, Johor and Melaka.
UOB Kay Hian (UOBKH) Research viewed the developer’s decision to expand into industrial properties as a “strategic move”.
This is particularly as IOIProp planned to monetise its existing landbank, such as in Melaka, where land has remained undeveloped.
“By capitalising on its unutilised land assets, IOIProp is positioning itself to unlock value without requiring new land acquisitions.
“For instance, the iSynergy @ Kulai expansion will utilise land from IOIProp’s existing 3,418 acres of landbank in the Bandar Putra Kulai township in Johor.
“This approach reduces upfront costs while taking advantage of Johor’s rapidly growing industrial sector, which is on track to become a regional economic hub akin to Shenzhen, China,” the research house said in a report.
According to UOBKH Research, the group will soon hold about 1,275 acres of industrial land bank (double from its initial industrial land bank of around 590 acres), with the expansions.
“This will position IOIProp as a key player in the industrial real estate space, larger than Eco World Development Group Bhd’s 1,176 acres and second only to Sime Darby Property Bhd, which has about 3,000 acres.
“This scale of landbank, combined with strategic monetisation and industrial demand, should positively impact IOIProp’s long-term financial performance, enhancing its competitiveness in the market,” the research house said.
It noted that the group planned to set up two more industrial parks over the next three to five years in these regions.
Apart from this, IOIProp is exploring opportunities to sell portions of its industrial land bank to data centre operators, beyond the traditional build-to-sell industrial property mode.
The group is in discussions with four to five data centre operators in Kulai, Johor, with potential land sales priced at a minimum of RM100 per sq ft.
“IOIProp’s Kulai land cost is RM2 per sq ft, as reported in the financial year 2023 annual report.
“This pricing far surpasses the RM75 per sq ft achieved by Eco World in its recent land sale to Microsoft.
“Such a strategy offers the potential for substantial margins, capitalising on the booming demand for data centre infrastructure.
“With IOIProp’s industrial land bank in Kulai currently standing at 750 acres after expansion, even a partial sale to data centre players could generate significant proceeds,” the research house said.
