PETALING JAYA: IOI Properties Group Bhd
(IOIPG) is increasingly seen as a net asset value (NAV) compounder, as the company becomes a major office landlord in Singapore’s central business district (CBD).
Capital recycling initiatives, including the proposed Malaysian real estate investment trust (M-REIT) spin-off, involving the divestment of a 40% stake that raises about RM2bil in cash proceeds, further supports this NAV narrative.
UBS Research expects IOIPG’s NAV to expand about 5% annually from 2025 to 2030, in line with its past performance, where NAV also grew at a compound annual growth rate of 5% from 2020 to 2025.
“We believe the M-REIT spin-off can drive about a 4% upgrade to the street’s (NAV) estimates, while the recent acquisition of Asia Square Tower 2 (in Singapore) paves the way for a sustained 2% per annum NAV accretion over time,” it said.
Moreover, these structural tailwinds should outweigh downside risks from slower-moving developments such as W Residences.
Separately, it noted that additional surprises could come from non-core land disposals, with potential after-tax gains of more than RM400mil already this year.
Reflecting these developments, UBS Research lifted the NAV per share by 11% as it rolled forward valuations to financial year 2027 and incorporated recent assumptions, which in turn led it to raise the target price to RM4.60 from RM3.90.
Meanwhile, DBS Group Research said IOIPG has emerged as one of the largest commercial landlords in Singapore, with a CBD-focused portfolio now worth about S$10bil.
This includes its flagship development IOI Central Boulevard valued at S$4.15bil, South Beach at S$2.8bil, and the proposed Asia Square Tower 2 at about S$2.48bil, pending shareholders’ approval.
These assets cover about 2.47 million sq ft of attributable net lettable area (NLA) and are expected to account for over 70% of IOIPG’s investment property portfolio.
Data from DBS Research showed that IOIPG now ranks fourth among CBD office landlords in Singapore, behind CapitaLand Integrated Commercial Trust with 3.12 million sq ft of NLA, Keppel-REIT with 2.6 million sq ft, and Hongkong Land with 2.51 million sq ft.
DBS Research also noted that Singapore continues to attract strong institutional capital inflows, supported by political stability, rule of law, and deep tenant demand from multinational corporations and financial institutions.
