PETALING JAYA: IOI Properties Group Bhd
(IOIPG) is poised for a strong finish to its financial year ending June 2026 (FY26), underpinned by robust property sales, accelerating industrial land monetisation and an expanding recurring income base.
This has prompted TA Research to maintain its “buy” call while raising its target price to RM4.55 from RM4.52. “We remain positive on IOIPG’s operating outlook.
“We estimate property sales in the fourth quarter of financial year 2026 could exceed RM700mil, led by the strong take-up of The Cube Plus, its latest commercial development in Bandar Puteri Puchong.
“Industrial land monetisation remains an important earnings and cashflow driver, while the proposed Asia Square Tower 2 acquisition should strengthen recurring income.”
Reflecting the improved outlook, TA Research raised its FY26 and FY27 earnings forecasts by 11.6% and 22.1%, respectively, although FY28 earnings were trimmed by 25.6% due to changes in the timing of recognising land-sale contributions.
The research house expects The Cube Plus to contribute between RM590mil and RM660mil in sales after assuming an 80% to 90% booking conversion rate.
The RM738.3mil gross development value project was fully booked within four to six hours of its March launch.
This would lift FY26 underlying property sales above RM2.06bil, surpassing management’s RM2bil target.
Including RM1.35bil worth of land sales, total FY26 sales could exceed RM3.4bil, outperforming TA Research’ earlier RM3.2bil forecast.
It also revised its earnings recognition timeline for several land disposals.
Profits from the Jalan Ampang land sale, which was completed in June, have now been brought forward into FY26, while contributions from the Banting and Senai disposals are expected in FY27 instead of FY28. The three transactions carry a combined value of RM1.1bil with an estimated gross profit of RM501.5mil.
Looking ahead, TA Research sees industrial land becoming a more meaningful earnings contributor.
IOIPG owns about 1,300 acres of industrial land across Banting, Melaka and Kulai, where management expects further monetisation opportunities through outright land sales as well as future industrial developments.
The sale of 136 acres in Banting to Bridge Data Centres is expected to enhance the attractiveness of the remaining land, while industrial parks in Melaka and Johor are benefiting from growing manufacturing demand and investment interest linked to the Johor-Singapore Special Economic Zone.
The research house believes land sales offer the quickest earnings catalyst because of their faster monetisation and lower capital requirements. It also said the proposed listing of IOI real estate investment trust (REIT) remains on track for the fourth quarter of calendar year 2026.
Based on the proposed portfolio, it estimates a distribution yield of around 6.5% to 7%, with early interest already emerging from domestic and foreign institutional investors.
An analyst remained cautious on valuation following the stock’s strong share price appreciation.
“While earnings visibility has improved, it believes upside could be capped by the group’s relatively elevated gearing and the execution risks surrounding major corporate exercises, including the REIT listing and acquisitions,” he told StarBiz.
