PETALING JAYA: Sime Darby Property Bhd
(SimeProp) is ruling out any plans for a real estate investment trust (REIT) listing of the company’s assets for now.
Its group managing director and chief executive officer Datuk Seri Azmir Merican said the priority remains building up recurring income portfolio before anything else.
“It is too premature to talk about a REIT-listing and we want to have assets that are ripe and ready for us.
“We are in the middle of executing our plans to build up recurring income and we have to do a lot more here before we talk about what do we do or any possible monetisation of these assets,” Azmir said at a media briefing last Friday.
To do this, SimeProp would consider both organic and inorganic expansion, Azmir said.
He said gearing levels were at a manageable levels, at some 31%.
“Gearing levels are at a very healthy level. If it is too low gearing then we have a very lazy balance sheet.
“This is not too low either. We have to strike a balance between what is healthy as well. We think that at 31% or even higher is still very healthy and robust,” Azmir said.
“However, this needs to be matched with cashflow. If you have a higher gearing and strong cashflow then it is not an issue since we are using debt to generate income.
“Also, our operating cashflow is positive which helps us generate income over our costs to cover interest costs,” he added.
Meanwhile, Azmir said there would be some impact on profit margins pursuant to the government’s decision to increase the scope of the sales and services tax (SST) to include the construction and commercial rentals.
“We still need to see how much we will be impacted by and where. There are negotiations to see how this will work.
“The Real Estate and Housing Developers’ Association has taken the lead to discuss this with the authorities,” he said.
“But I don’t want to speculate on the impact until later. When there is an SST expansion, there will be an impact – we want to see how we can work together with our contractors,” he added.
Commenting on the second quarter ended June 30, 2025 results, Azmir said the company’s projected full-year figures remains on-track with continued demand from the industrial segment as well as strong take-up rates for its residential segment.
Azmir said the focus on recurring income would have a positive impact on both the top-and bottomlines eventually.
SimeProp would soon open the KLGCC Mall, with revenue and profit to be recognised in the next quarter.
In the second quarter of this financial year, SimeProp recorded a net profit of RM143.5mil, or 2.11 sen per share, raising its first half profit to RM261.9mil, or 3.85 sen per share. Quarterly revenue was RM1.06bil, bringing first half’s revenue to RM1.93bil.
SimeProp also declared its first dividend of 1.5 sen per share for this financial year, that will amount to a total payout of RM102mil.
