HLIB Research said it believes multiple key catalysts are unfolding, positioning IOIProp as a standout performer in the property sector for 2025.
PETALING JAYA: IOI Properties
Bhd’s (IOIProp) IOI City Mall in Putrajaya has emerged as a leader in sustainable retail development through its record-breaking solar panel installation.
With 15,757 solar panels, the country’s largest mall now generates 8.2% of its total electricity needs, saving RM5.4mil annually and avoiding 7,570 tonnes of carbon dioxide (CO2) emissions.
According to Hong Leong Investment Bank (HLIB) Research, the mall’s green building index (GBI) certification further reinforces its commitment to energy efficiency, with Phase 2 currently under review.
“As energy costs rise, IOI City Mall’s investment in solar power and sustainability sets a benchmark for future commercial developments, proving that growth and green initiatives can go hand in hand,” the research house said in a report yesterday.
Note that IOI City Mall completed its solar panel installation in two phases: Phase 1 in October 2020, with a capital expenditure (capex) of RM10mil, and Phase 2 in November 2024, with an additional capex of RM8mil.
HLIB Research said: “Based on a 30-year lifespan and a total capex of RM18mil, the capex per month based on a straight-line basis works out to be RM50,000.
“In contrast, if the solar-generated electricity (815 megawatt-hours or MWh per month) were instead sourced from Tenaga Nasional Bhd, we estimate that it would incur a monthly cost of RM502,200.”
This calculation is based on an effective tariff rate of 61.62 sen per kilowatt-hour (kWh), which includes a base tariff of 45.62 sen/kWh (effective July 1, 2025, up from 39.95 sen/kWh currently) and an assumed imbalance cost pass-through surcharge of 16 sen/kWh.
“As a result, the rooftop solar installation delivers electricity cost savings of approximately RM452,000 per month, amounting to RM5.4mil annually.”
Meanwhile, based on an annual solar power generation of 9,780 MWh and a grid emission factor of 0.774 tonnes of CO2 per MWh for Peninsular Malaysia, HLIB Research estimated that the annual carbon emissions avoided amount to approximately 7,570 tonnes of CO2.
It added that the stock has the potential to achieve syariah compliance in May, unlocking significant institutional demand.”
“To put this into perspective, this reduction is equivalent to 125,850 mature trees absorbing CO2 annually, covering an area of approximately 675 football fields (assuming one tree absorbs 60kg of CO2 per year), removing 1,640 gasoline-powered cars from the roads, or powering 1,150 Malaysian homes for an entire year,” the research house said.
HLIB Research pointed out that IOI City Mall Phase 1 was awarded the GBI certification under the Non-Residential Existing Building segment in October 2022.
It said Phase 2 is currently under review for certification.
The solar panel installation is also expected to significantly boost the energy efficiency score, which holds the highest weightage in the GBI rating system.
Given these reasons, HLIB Research has maintained a “buy” recommendation on the stock with an unchanged target price of RM4.05 per share.
“We believe multiple key catalysts are unfolding, positioning IOIProp as a standout performer in the property sector for 2025,” said the research house.
It added that the stock has the potential to achieve syariah compliance in May, unlocking significant institutional demand.
“Separately, its potential real estate investment trust listing in 2026 to 2027 could also unlock substantial value from prime assets such as IOI City Mall and IOI Resort City hotels.
“Finally, its 3,900 acres of prime land in Kulai within the Johor-Singapore Special Economic Zone will position it well to capture both industrial and residential demand,” HLIB Research pointed out.
IOIProp shares closed unchanged at RM1.91 yesterday.
