RHB Research said the development of SimeProp’s two data centres is on track.
PETALING JAYA: There should not be any potential risk from US restrictions on exports of artificial intelligence (AI) chips for Sime Darby Property Bhd
’s (SimeProp) data centre projects, as its partner is a US-based operator, according to analysts.
RHB Research said the development of SimeProp’s two data centres, secured via two build-and-lease agreements with Pearl Computing Malaysia last year, is on track.
“The construction of first phase is very much on schedule, while the team will have a few sessions with potential tenderers for the second phase on the technical requirements over the next two quarters,” the research house said in a report yesterday.
The property developer also clarified that it is only involved in design and planning, infrastructure planning and construction management in the pre-operation stage of the projects, and would be leasing only the shell and core facility upon completion.
“As its partner is a US-based operator of data centres, the potential risk should be rather mitigated.
“In the meantime, its negotiations with other data centre players are still ongoing despite the restriction on AI chips by the United States,” RHB Research said.
The first and second phases are slated for completion in the second half of 2026 and 2027.
The research house said it remained upbeat about SimeProp’s growth prospects, with the management committed to growing its portfolio of investment properties under the company’s SHIFT25 strategy, as well as the group’s RM3.6bil sales target.
“About RM4bil worth of SimeProp’s projects will enter the market this year versus RM4.2bil last year.
“Of these, projects valued at RM1.75bil will be launched in the first half. The products to be launched are balanced, in our view, comprising residential landed (28%), residential high-rise (27%), industrial (31%) and commercial (14%) segments,” RHB Research said.
The research house also noted the percentage of high-rise projects would be lower year-on-year (it made up 38% of total launches last year), while commercial products would account for a higher portion of its total launches this year.
“As most of the launches are predominantly new phases in existing townships and projects (such as Bandar Bukit Raja, the Elmina township and business park, and Serenia City), we believe the demand momentum should continue,” RHB Research said.
The research house said SimeProp’s assets that generated recurring income contributed about 10% of total earnings last year.
Particularly, the occupancy rates for Metrohubs 1 and 2 logistics warehouses in Selangor jointly developed with LOGOS SE Asia Pte Ltd improved to 68% and 73%, from 47% and 67%, respectively, in the previous quarter.
The KL East Mall and Elmina Lakeside Mall have already achieved high occupancy rates of almost 100%.
“KLGCC Mall (previously known as Senada Mall) will be the next retail asset to be opened in the third quarter of this year. Management indicated that the committed occupancy rate for the mall, with a gross floor area of 600,000 sq ft, has already achieved 70%,” RHB Research said.
It has a “buy” call on SimeProp with a target price of RM2.33.
