PETALING JAYA: Sime Darby Property Bhd
(SimeProp) is expected to sustain new property sales at around RM4bil in the financial year 2026 (FY26), driven by three key industrial projects.
The group’s Vision Business Park, Bandar Bukit Raja Business Park and Elmina North would anchor SimeProp’s industrial momentum in FY26, according to CIMB Research.
The property developer is also gearing up to expand its recurring income streams with long-term data centre (DC) leases at Elmina Business Park expected to begin contributing in FY27, signalling a strategic pivot towards stable, recurring revenue under its SHIFT32 roadmap spanning the 2026 to 2032 period.
“We expect SimeProp’s recurring income profile to be significantly boosted by its combined RM7.6bil contracts to lease its DCs at Elmina Business Park for 20 years; with full-year revenue contributions expected to kick in from FY27 onwards,” said the research house in a report coverage on the company.
“Based on the initial 20-year lease period, these projects are estimated to contribute RM794mil, or 7% of our sum-of-parts (SOP) value, potentially rising to RM1.2bil, or 9% of SOP, if the two five plus five year extensions are exercised.”
It has a “buy” call and a SOP–based target price of RM1.75.
Another analyst covering the stock expects recurring income to account for nearly 30% of SimeProp’s earnings before interest and taxes in 2028, aligning with management’s goal of a 70:30 split between recurring and non-recurring earnings.
The analyst noted SimeProp’s track record, having outperformed its internal sales targets for eight straight years.
Investment and asset management segments are likely to support potential medium-term valuation gains.
Coming off a strong earnings base in FY25, CIMB Research said SimeProp is projected to deliver an earnings per share compounded annual growth rate of 9%, supported by a FY26 property sales target of RM4bil and a higher mix of industrial products.
This growth is underpinned by an attractive FY26 to FY28 return on equity of 5.2% to 5.9%, alongside a rising portfolio of assets under management generating recurring income streams.
However, net gearing is projected to peak at 48.8% in FY28, albeit remaining below the group’s internal ceiling of 50%.
Foreign shareholding stood at 8.5% as of end-February 2026, near the lower end of its historical range, which peaked at almost 15% in November 2017.
CIMB Research said that mid- to long-term earnings could be supported by SimeProp’s partnership with SD Guthrie Bhd to develop future industrial hubs in Carey Island and Kuala Selangor, which are not yet reflected in the research house’s forecasts.
It added that preliminary analysis suggests that both land banks could yield an additional gross development value (GDV) of RM8.7bil, equivalent to roughly 9% of SimeProp’s remaining total land bank GDV of over RM100bil as of the nine-month period of 2025.
The calculation assumes a land cost of RM20 per sq ft, a land cost-to-GDV ratio of 15%, and an effective stake of 50%.
Touching on the group’s Kuala Lumpur Golf and Country Club (KLGCC) Mall, the research house said it was performing better than expected, and on track to break even sooner than initially expected, owing to stronger-than-expected footfall (about 100,000 visitors) during its first few weeks of operations.
The soft launch of the KLGCC Mall took place on Oct 24, 2025, with 90% of retail space already committed.
