PETALING JAYA: IOI Properties Group Bhd
(IOIPG) is poised for a stronger dividend profile over the next few years, underpinned by asset-monetisation initiatives and improving earnings visibility across its key markets, while the upcoming listing of the company’s real estate investment trust (REIT) together with recent land disposals will unlock value and bolster shareholder returns.
Hong Leong Investment Bank (HLIB) Research highlighted that these developments could pave the way for a higher payout trajectory.
“With the upcoming REIT listing exercise and recent land sales, we think there is scope for the group to declare a higher dividend in the financial year ending June 30, 2027 (FY27). Based on our estimate, dividend per share could amount up to 21 sen, implying a compelling dividend yield of 5.6%,” it said.
The research house maintained its “buy” call on IOIPG, citing its resilient exposure to both Malaysia and Singapore.
It raised the stock’s target price for the counter to RM5.20 from RM4.15 previously based on a lower 20% discount (from 30%) to its revised estimated revalued net asset value (RNAV) of RM6.50.
“We raise our RNAV mainly to reflect REIT-related future value gains and revaluation gain from IOI Central Boulevard Towers (ICBT). We also narrow the RNAV discount to 20% (from 30%) to reflect the group active asset-monetisation strategy,” HLIB Research explained.
“The stock offers a compelling proxy to resilient Malaysia and Singapore real estate markets, providing diversification and a defensive hedge amid global volatility,” it highlighted.
According to HLIB Research, the upcoming listing of IOI Properties Malaysia REIT highlights the group’s active strategy in crystallising value from mature Malaysia assets and recycling capital into higher-return opportunities. It added that the move is only the beginning, noting the group’s sizeable Singapore portfolio.
“Once the Malaysia REIT is listed, we expect market attention to shift towards the monetisation of its Singapore portfolio, which could serve as the next major re-rating catalyst,” it stated.
“We see three viable pathways for IOIPG to monetise its Singapore portfolio: a full Singapore REIT listing by 2029 following ICBT’s rental reversion cycle, a staged approach by listing South Beach first and injecting ICBT later, or an earlier monetisation via a private commercial real estate fund (potentially by 2027),” it added.
HLIB Research pointed out that IOIPG’s Singapore office segment remains a key earnings driver, supported by favourable market conditions.
“We believe the Singapore central business district office market is entering a structural upcycle, driven by tight supply and sustained demand for prime assets,” it said, adding that recent leasing rates at IOIPG’s assets indicate upside potential.
Meanwhile, the company’s China operations are gradually stabilising.
“The China segment is transitioning into a recurring income phase,” HLIB Research noted, pointing to improving prospects driven by infrastructure developments and new hospitality assets, which could emerge as an additional contributor to future earnings growth.
Meanwhile, one analyst said investor interest in IOIPG is expected to strengthen as the group moves ahead with its REIT listing, which unlocks value from its mature asset base while still preserving long-term income visibility.
“IOIPG is also likely to be supported by the potential for stronger-than-expected valuation outcomes from the REIT, which could enhance overall proceeds and reinforce the group’s capital recycling strategy.”
