SimeProp's industrial properties to lift earnings
PETALING JAYA: Sime Darby Property Bhd (SimeProp) has achieved 100% take-up for the latest instalment of its linked homes in The Nine, Elmina Green, development located in Shah Alam, Selangor.
In a statement, the developer said the latest launch saw all 192 double-storey linked homes snapped up, reinforcing the strong demand observed during a March preview.
Targeted for completion in June 2026, The Nine, Elmina Green has a gross development value of RM198.2mil. Built-up areas for the homes range from 2,000sq ft to 2,342sq ft, with prices starting from RM921,888.
Meanwhile, RHB Research said in a report that SimeProp's earnings potential from the upcoming lease of two data centres in Elmina Business Park is under-appreciated by the market.
The research house noted that management also strengthened its investment-property portfolio recently by acquiring the remaining stake in two modern logistics warehouses that are worth RM232mil, potentially paving the way for a real estate investment trust (REIT) listing in one to two years.
'The REIT should have a high concentration of good quality industrial properties, which should garner a premium valuation,' RHB Research said.
Thus far, SimeProp's Data Centre 1 project is on track to be completed in the third quarter of 2026 (3Q26) while the construction work for Data Centre 2 should be up for tender in the second half of this year with completion in 2027.
'While the financing plan for Data Centre 2 has yet to be firmed up, we highlight that SimeProp recently successfully raised a RM800mil sukuk at very attractive rates averaging 4.02% with a tenure of seven to 15 years, and the sukuk was 6.74 times oversubscribed,' the research house said.
RHB Research noted that the funds raised would mainly be used for long-term working capital to grow the industrial, logistics and data centre portfolio.
'We do not discount the possibility that SimeProp may look to gear up further to grow its investment-property portfolio. Based on the 2024's financials, the company has debt headroom of RM3.7bil before it hits 0.6 times net gearing (currently at 0.24 times), which should not be a big concern in our view as a REIT listing is always a wild card,' the research house said.
RHB Research said the 20-year leases of two data centres are worth RM7.6bil in total. Assuming the group will own 100% of both, the research house estimates that the leases for the data centres could contribute about RM150mil to RM160mil a year after interest and tax in the initial years, boosting net profit by more than 20% from FY28 onwards.
The leases are also expected to grow progressively over a 20-year period due to the step-up feature.
Currently, SimeProp also has a total of 1.48 million sq ft of net lettable retail area, including the upcoming KLGCC Mall.
'However, its industrial property portfolio is more sizeable, as it currently includes the two logistics warehouses in Bandar Bukit Raja (RM232mil), two hyperscale data centres (around RM6bil), as well as Metrohub 1 and 2 in Bandar Bukit Raja, Selangor, where SimeProp has a 27.4% interest,' RHB Research said.
The research house added the group's seven industrial park projects that it currently has in Selangor, Negri Sembilan and Johor would suggest that it will have plenty of opportunities to build its industrial portfolio.
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