PETALING JAYA: Sime Darby Property Bhd
’s (SimeProp) dividend reset has signalled a shift to its strong recurring income and lesser of its lumpy earnings.
Group managing director and chief executive officer, Datuk Seri Azmir Merican, said the group had decided to enhance its dividend policy from 20% to a clearer-defined dividend payout ratio of 40% to 60% of net profit.
“This enhanced dividend policy is because we see a rising contribution from our recurring income business. As you know, in the last few years, we have been building a portfolio of assets which include industrial and logistics as well as data centres.
“As these assets and fund management businesses come online, it has given us more earnings predictability,” he said during the group’s first-half earnings briefing online yesterday.
According to him, this policy is a progressive one – as recurring income grows, the payout ratio will be enhanced.
“If you go back a couple of years, you would see that our results were lumpy. It was difficult to sustain incremental growth over a long period of time.
“Property developments are typically influenced by cycles, launches and market factors that we cannot overcome ourselves,” he explained.
Labelling it as a major focus area for the group, he noted that recurring income is targeted to make up 30% of its earnings before interest and taxes by financial year 2028 (FY28). “The goal is to hit 30%, but that doesn’t mean we don’t grow the property business segment.
“I believe we actually have a healthy problem, where both the industrial and property segments are growing together,” he said.
Assets under management for the group have grown to RM5bil while funds under management sit at RM2.25bil.
Azmir said in terms of development, SimeProp had acquired Wisma Unirazak, whereby it is looking to transition the prime land into a new mixed-use development.
With a gross development value (GDV) of RM900mil, this has signalled the group’s entry into the busy city centre in Jalan Tun Razak.
“Next up is the BBR North which is an industrial development. We’ve been working on it for a while now, and the evolution is to move northwards where we’ll work with our sister company, SD Guthrie Bhd.
“Phase 1 will consist of turning 1,000 acres of land into a heavy duty industrial park,” he said.
SimeProp also undertook the proposed RM418.5mill acquisition of 556.96 acres in Kulai, Johor, for a sustainable township within the Johor-Singapore Special Economic Zone.
Azmir said the group will be looking at more opportunities in Johor, as unlike its peers, it has not done very much in that state. He said, however, that while the state does present potential, the group will ensure it goes in long term.
Internationally, SimeProp will be embarking on its maiden project in Melbourne, Australia called the Aurum. Azmir said the first phase of the project will be launched in the coming months.
Meanwhile, for the first half or 1H of the year ended June 30, 2026, Azmir said the group had delivered solid results. Revenue rose 1.3% year-on-year (y-o-y) to RM1.96bil, while net profit surged by nearly 84% to RM480.8mil.
The property development segment recorded RM1.8bil in revenue, driven by stronger industrial and high-rise construction progress, namely, Bandar Bukit Raja, Elmina Business Park, City of Elmina, Serenia City and KLGCC Resort.
It had launched developments with a GDV of RM2bil, and as at Aug 9, 2026, bookings stood at RM1bil.
For the first half, sales were registered at RM1.8bil. A further RM120.4mil in fair value gains from its build-to-lease data centre in Elmina Business Park and semi-detached factories, The Cubiz Collection in the City of Elmina also contributed to its earnings.
Its asset management segment also posted a higher revenue of RM137.8mil, driven mainly by the data centre lease income and improved share of results from joint ventures following the reversal of provisions relating to the disposal of the Sime Darby Business Centre in Singapore.
The segment further strengthened its industrial and logistic portfolio with the completion of Metrohub 4, and the groundbreaking of Metrohub 3 at SDPLOG’s E-Metro Logistics Park in Bandar Bukit Raja.
For the second quarter ended June 30, 2026 net profit more than doubled to RM322mil y-o-y. This was on the back of a higher revenue of RM1.16bil versus RM1.06bil in the same quarter a year ago.
A first interim single-tier dividend of 1.70 sen per share was declared, payable on Oct 21, 2026.
As at June 30, 2026, SimeProp maintained unbilled sales of RM3.8bil, positive operating cash flow and net gearing of 35.5%. Moving forward, Azmir said the group will remain focused on delivering its targets, backed by a planned launch pipeline of RM4.7bil in GDV across domestic and international markets.
