KUALA LUMPUR: IOI Properties Group Bhd’s new property sales outlook for FY24 is expected to be better, driven by local and Singapore projects, according to MIDF Research.
“The launch of Marina View in Singapore with gross development value (GDV) of S$2.6bil is expected to boost new sales of IOI Properties in FY24 in view of the improving property market in Singapore,” MIDF said.
In addition, the research house said the sales of completed inventories in China would further propel new sales growth in FY24.
“Note that IOI Properties recorded new sales of RM1.37bil in 9MFY23, on track to match new sales of RM1.9b in FY22. In a nutshell, we expect new property sales to be higher than RM2bil in FY24,” MIDF said.
The research house said property investment division of IOI Properties is expected to continue stage earnings recovery in FY24, underpin by the higher rental income from IOI City Mall in Putrajaya following the opening of phase 2 of IOI City Mall.
IOI Properties has eight retail assets with market value of RM4.6bil and four office towers with market value of RM1.2bil.
It has two offices under construction which are IOI Central Boulevard in Singapore and IOI Palm City in Xiamen, China which collectively have indicative market value of RM13.6bil.
MIDF said that gives total market value of investment properties of over RM19bil.
“IOI Properties is looking to list its investment properties under REIT in the long term to unlock the value of its investment properties. If that materialises, the REIT will be the largest REIT in Malaysia in term of asset size.
“Nevertheless, we reckon that the listing of REIT may not be in the short-term as IOI Properties could fetch better yield for IOI Central Boulevard in Singapore after one round of 3-year tenancy cycle,” it said.
MIDF has maintained a “buy” call on IOI Propertes with a higher target price of RM1.38 from from RM1.29.
“We remain positive on IOI Properties as we see stable long-term prospect for IOI Properties due to stable outlook for property development division and property investment division. Besides, the potential listing of property investment division in the medium to long term could unlock value of the division.
“Meanwhile, valuation is undemanding as IOI Properties is trading at 71% discount to NTA per share of RM3.95. Hence, we maintain our ‘buy’ call on IOI Properties,” MIDF said.