IOI Properties Group Bhd
. plans to raise as much as RM2.43bil from the initial public offering of a real estate investment trust, more than it initially sought, as Malaysia heads for its strongest year of IPO fundraising in over a decade.
It had previously targeted RM1.98bil in proceeds, according to a stock exchange filing in April. The latest offer size includes an over-allotment option, with the prospectus due to be filed on Tuesday.
The trust is ready to tap the market even as investor doubts over the artificial intelligence trade and geopolitical tensions roil global stock markets. Investors are becoming more selective, especially after volatility swept through data center operator deals last month. IPOs have slowed to a near standstill even in the US, where the market is focused on the coming megadeal of Anthropic PBC.
"Malaysia is still very strong in terms of our fundamentals,” said Chris Chong, chief executive officer of IOIPG Malaysia Real Estate Investment Trust, in an interview.
"We are hitting a record year mainly because our GDP growth has been fairly recent, the ringgit has recovered, huge investments are heading into Malaysia and that brings a lot of confidence back to the capital market.”
At its targeted size, the REIT deal would push Malaysian IPO proceeds to about US$2.2bil in 2026. Big Caring Group Bhd., which is due to list on Nov. 19, is also seeking about US$565mil. Together with other deals in the pipeline, that could move Malaysia closer to its record IPO fundraising year in 2012.
The offering is backed by nine properties, anchored by IOI City Mall outside Kuala Lumpur. The mall, Southeast Asia’s largest that draws about 3 million visitors a month, was among the biggest beneficiaries when Malaysia hosted a Formula One race in place of Bahrain last month, Chong said. The event drew more than 200,000 people and generated hundreds of millions of dollars in revenue.
IOI Properties, Malaysia’s largest property company by market value, is selling a 40% stake in the REIT while retaining 60% control. The company, founded by the late tycoon Tan Sri Lee Shin Cheng, is using the deal to raise funds from its property portfolio.
The trust is valued at RM5.28bil and will issue up to RM2.65bil in medium-term notes as well, according to Chong, who is also chief operating officer at IOI Properties. After listing, it could expand its Malaysian portfolio by buying mature properties from its parent company or third parties, Chong said.
The REIT will add another Lee family-controlled company to Malaysia’s stock market, alongside IOI Properties and IOI Corporation Bhd., one of the country’s flagship plantation companies. Its offering is set to rank behind Sunway Healthcare Holdings Bhd., Malaysia’s biggest in nine years. - Bloomberg
