PETALING JAYA: IOIPG Malaysia real estate investment trust’s or REIT projected distribution yield of 6.6%, above the 6.2% average of its large mall REIT peers, could appeal to income-seeking investors ahead of its listing on Bursa Malaysia on Nov 25.
TA Research has assigned the REIT a fair value of RM1.08 per unit, representing a 12.5% upside to its initial public offering (IPO) retail price of 96 sen.
The valuation is based on a target yield of 6% applied to its 2027 distribution per unit (DPU) forecast of 6.47 sen.
The research house noted that the REIT offers a higher yield than established mall REITs, including Sunway-REIT, IGB-REIT, Pavilion-REIT and KLCCP Stapled Group.
It also trades at a lower price-to-net asset value of 1.1 times against its peers’ average of 1.35 times.
IOIPG Malaysia-REIT will debut with nine retail, hospitality and office properties valued at RM7.66bil, anchored by IOI City Mall, which accounts for 67.2% of the portfolio’s appraised value. For the 293-day projection period ending June 30, 2027 (FY27), management expects revenue of RM551.6mil, net property income (NPI) of RM377.6mil and profit after tax of RM265.6mil.
Distributable income of RM280.5mil translates into an annualised DPU of 6.33 sen, implying a yield of 6.6% at the IPO price.
