KUALA LUMPUR: IOI Properties Group Bhd
plans to establish and list a real estate investment trust, IOIPG Malaysia Real Estate Investment Trust (IOIPG REIT), in a move aimed at unlocking asset value and strengthening its capital position.
In a filing with Bursa Malaysia, it said the proposed REIT will involve the injection of retail, office and hotel assets with a combined value of about RM7.58bil, alongside an offering of up to 2.2 billion units and a Main Market listing on Bursa Malaysia Securities Bhd.
The exercise includes the disposal of key assets such as IOI City Mall, IOI City Towers and several hotel properties, including W Kuala Lumpur and Le Méridien Putrajaya, to the REIT.
The disposal will be satisfied via the issuance of 5.5 billion units at an indicative price of RM0.90 each, as well as RM2.65bil in cash.
The proposed initial size of IOIPG REIT upon the proposed listing is 5.5 billion units.
IOIPG said the proposed REIT establishment will facilitate the group’s planned disposals, offering and listing.
“The proposed REIT establishment also provides a platform for the IOIPG Group to unlock the value of its investment properties via a more efficient and streamlined asset holding structure,” it said.
IOIPG noted that the proposed listing will enhance the liquidity of the underlying properties, as the REIT will gain direct access to capital markets to fund future real estate acquisitions.
“The proposed listing will provide investors with the opportunity to participate in the future growth of the underlying subject properties through ownership of the publicly traded units,” it added.
IOIPG will retain a 60% stake in the REIT post-listing, with up to 40% of the units to be offered to investors.
The proposed offering includes a retail tranche for shareholders, employees and the Malaysian public, as well as an institutional placement to institutional and selected investors via bookbuilding.
The proceeds, estimated at RM4.62bil, will mainly be used to repay borrowings and fund project development and property investment.
IOIPG intends to allocate approximately RM3bil from the gross proceeds to pare down the group’s total borrowings. The group intends to use the remaining proceeds of approximately RM2.6bil to repay other outstanding borrowings within 12 months from the date of the proposed listing.
The REIT structure also incorporates long-term master lease agreements for the hotel assets, providing guaranteed minimum rental income alongside upside from performance-linked returns.
The group said the move forms part of its capital recycling strategy, allowing it to monetise mature assets while maintaining exposure through its retained stake in the REIT.
“The proposals will enable the group to unlock the value of its investment properties and enhance capital efficiency, while providing investors access to stable and recurring income streams,” it said.
The exercise is subject to approvals from the Securities Commission, Bursa Malaysia and shareholders, and is targeted for completion by the fourth quarter of 2026.
