Latest news with #IOIProp
The Star
3 days ago
- Business
- The Star
IOIProp cements regional real estate push
PETALING JAYA: IOI Properties Group Bhd 's (IOIProp) latest move to take full control of Singapore's landmark South Beach development signals a bold step towards consolidating its regional real estate ambitions. Analysts see this as a strategic pivot that could both unlock value and test the developer's capital discipline. Hong Leong Investment Bank Research (HLIB Research) described the acquisition as 'a strategic and value-accretive move'. The research house said the transition from a 49.9% joint-venture stake to full ownership unlocks several key advantages – including full strategic control, operational synergies, and immediate earnings uplift. 'The South Beach assets are already income-generating, providing an immediate boost to IOIProp's earnings base and recurring income stream,' HLIB Research highlighted. 'Post-acquisition, IOIProp cements its status as one of the largest asset owners not only in Singapore, but also (as) a growing regional real estate powerhouse,' it added. HLIB Research maintained its 'buy' call on the stock with an unchanged target price (TP) of RM4.05 per share. It estimated an earnings per share uplift of 1.63 sen for IOIProp in 2026, while net gearing is expected to rise to 0.93 times from 0.7 times as of June 30, 2024. 'Despite concerns over higher gearing, the risks appear manageable given its stable recurring income, strong assets and upcoming real estate investment trust (REIT) listing plan,' HLIB Research said. TA Research took a more cautious view, noting: 'We are somewhat surprised by this acquisition, as we had earlier anticipated that the group would prioritise managing its already elevated net gearing levels.' It estimated that, if fully debt-funded, IOIProp's net gearing would climb to 0.87 times. 'IOIProp may be positioning itself for the establishment of a REIT, given its maturing investment property portfolio,' TA Research said, highlighting that it carried a total book value of RM21.3bil as of the financial year ended June 30, 2024. 'Such a move would help cushion the impact of the South Beach acquisition on IOIProp's gearing profile,' it added. TA Research reiterated its 'buy' call, with an unchanged TP of RM2.78, citing IOIProp's historical willingness to raise equity capital to fund strategic investments. Meanwhile, MIDF Research adopted a neutral stance, highlighting that IOIProp's net gearing would increase to 0.87 times post-acquisition. It acknowledged that 'the acquisition will allow IOIProp to have full control and management of the South Beach property, which is generating investment income.' MIDF Research revised its TP for the stock to RM1.79 from RM1.84, after widening the revalued net asset value discount to 65% from 64% in view of the company's higher net gearing. It kept its 'neutral' rating on the developer, citing limited near-term catalysts. IOIProp had announced that its unit, IOI Consolidated (Singapore) Pte Ltd, had signed a conditional share sale agreement to acquire the remaining 50.1% stake in Scottsdale Properties Pte Ltd, owner of South Beach, for about S$834.22mil.
The Star
4 days ago
- Business
- The Star
IOIProp paying ‘high but reasonable' price
PETALING JAYA: IOI Properties Group Bhd (IOIProp) is paying a 'seemingly high but reasonable' price to take full ownership of Singapore's premium South Beach commercial properties, according to a property consultant. It was announced yesterday that IOIProp would be acquiring the remaining 50.1% stake in Scottsdale Properties Pte Ltd for S$834.22mil or RM2.75bil. However, the fact that the landmark deal would be partly financed by bank borrowings has garnered additional attention, given IOIProp' already high gearing position. As of the third quarter of financial year 2025, IOIProp sat on total borrowings of RM19.4bil, with a higher net gearing of 0.75 times. In a filing with Bursa Malaysia, IOIProp said it would acquire Singapore-listed City Developments Ltd's (CDL) 50.1% stake in Scottsdale – held via Ascent View Holdings Pte Ltd. With this, its equity interest will rise to 100%. Scottsdale is the holding company of South Beach Consortium Pte Ltd, which owns the South Beach commercial properties. Meanwhile, CDL is linked to Hong Leong Group Singapore. The South Beach commercial properties consisted of a 34-storey South Beach Tower offering 508,869 sq ft of Grade-A office space, South Beach Avenue with 30,797 sq ft of retail space and a 634-room JW Marriott Hotel Singapore South Beach. Zerin Properties chief executive officer Previn Singhe said while the price may seem high in current market conditions, one must factor in the strategic location, premium tenant mix, and limited supply of such integrated developments. 'It may also signal IOI Properties's optimism in the resilience of Singapore's prime real estate market. 'From a financial standpoint, the acquisition price of S$834.22mil appears reasonable for a landmark asset with Grade A offices, a luxury hotel, residences, and retail, especially considering the yield compression and flight to quality in Singapore's commercial sector,' he told StarBiz. The acquisition is based on an agreed property value of S$2.75bil on a 100% interest basis, which represents a 3% premium over the latest valuation of S$2.67bil as of Dec 31, 2024. Previn said IOIProp's acquisition represents a 'bold and strategic' move that reflected confidence in the long-term fundamentals of Singapore's integrated development market. 'The South Beach commercial properties are a high-profile, mixed-use asset with strong positioning in Singapore, and taking full ownership provides IOI with greater control over asset strategy, branding, and capital decisions. 'This move aligns well with IOI's long-term investment horizon and its vision to build a strong overseas recurring income base,' he said. Previn noted that it was a well-calibrated deal, where CDL exits with capital freed for reinvestment, while IOIProp solidifies its footprint with full control of a trophy asset. 'It is a win-win, and a great example of a mature, cross-border transaction between two seasoned developers,' he said. This was concurred by Olive Tree Property Consultants chief executive officer Samuel Tan and executive director Tan Wee Tiam, who viewed the transaction 'positively'. 'This is more so as the two nations are working closely under the Johor-Singapore Special Economic Zone arrangement. 'By increasing its stake in the South Beach commercial properties, IOIProp solidifies its footprint in Singapore's prime real estate sector. The South Beach commercial properties will provide IOIProp with a steady stream of cash flow,' they said in a joint reply to StarBiz. Meanwhile, Rakuten Trade head of equity sales Vincent Lau described the acquisition as a 'fair' deal. 'This acquisition is expected to strengthen IOIProp's profile, especially in a market like Singapore that is doing well on an international scale. Also, land is scarce in Singapore. Hence, having premium, income-generating assets over there is strategic,' he said. In a statement, IOIProp group chief executive officer Lee Yeow Seng said the acquisition of the 100% equity stake in the South Beach development marked a significant strategic expansion for IOIProp in Singapore. 'Combined with the IOI Central Boulevard Towers and the W Singapore –Marina View hotel, this acquisition will elevate the group's profile as one of the major landlords of premium office space and a prominent player in the hospitality industry within the Republic,' he said. Moreover, CDL executive chairman Kwek Leng Beng said the 'strategic' divestment enables CDL to realise exceptional value, while entrusting the ownership to a partner that knows South Beach well, marking a natural evolution in its successful partnership.
The Star
5 days ago
- Business
- The Star
IOI Properties, RHB partner to offer green home loans
The property developer said the partnership underscores IOIProp and RHB's dedication to supporting homeownership. KUALA LUMPUR: IOI Properties Group Bhd (IOIProp) is partnering with RHB Banking Group (RHB) to launch home and renovation loans and financing and green property loans and financing for eligible residential properties across IOIProp's property portfolio. The loans and financing will be offered through RHB's HB Full Flexi Home and Renovation Loan/Financing, as well as the RHB Green Residential Property Loan/Financing programmes. In a statement yesterday, the property developer said the partnership underscores IOIProp and RHB's dedication to supporting homeownership while streamlining the move-in experience and promoting sustainable development approaches in the country. IOIProp's head of group sales and marketing and branding, Nicole Lee Chee Yiing, said the partnership will help to smooth out the homeownership journey for buyers. 'Through RHB Full Flexi Home and Renovation Loan/Financing, homebuyers will be given access to obtain financing packages of up to 90% plus 30% loan/financing margins for selected residential properties. 'The additional 30% loan/financing margin aims to assist eligible homebuyers in covering renovation costs at attractive overall home and renovation loan/financing rates,' she said. Lee said the renovation loans/financing will be disbursed directly to the buyers in stages based on renovation progress. 'We hope that through this financial solution in partnership with RHB, we will be able to help reduce the financing burden for buyers upon vacant possession, addressing this common pain point among home seekers.' Meanwhile, IOIProp said under RHB Green Residential Property Loan/Financing, home purchasers can opt for loan/financing margins up to 95% (inclusive of entry-cost financing), with an additional 5% to finance mortgage reducing term assurance (MRTA)/mortgage reducing term takaful (MRTT) coverage. 'Properties with Green Building Index (GBI), GreenRE or Leadership in Energy and Environmental Design certification are eligible under the campaign. 'The collaboration also aligns with the group's overall IOI Sustain Roadmap 2030, specifically its strategic focus on addressing climate change by reducing our carbon footprint as we continues to develop sustainable communities, among other initiatives,' it said. — Bernama
The Star
28-05-2025
- Business
- The Star
Malls, offices, and hotels perform admirably for IOIProp
IOIProp said the IOI City Mall in Putrajaya continues to record high occupancy rates supported by strong visitor traffic. PETALING JAYA: IOI Properties Group Bhd (IOIProp) says robust growth in its property investment, and hospitality and leisure segments buoyed its recent financial results for the nine months of its financial ending June 30. The two segments, which house the malls, office leasing, and hotels businesses registered year-on-year (y-o-y) revenue growth of 56% and 84%, respectively. This mitigated the softer performance of the property-development segment, which saw a 26% decline in revenue. IOIProp said the IOI City Mall in Putrajaya continues to record high occupancy rates supported by strong visitor traffic. On the office-space front, IOI City Tower One, a premium Grade-A office building in Putrajaya, has made significant progress by achieving close to 100% in leasing commitments, it said. 'These positive developments underscore the group's expertise in managing its investment properties. 'The group's retail and office assets are underpinned by strong recurring income,' IOIProp said. However, pre-tax profit for the period was down by some 35% y-o-y to RM430.9mil, the company said. The muted performance was primarily attributed to higher interest expense following the commencement of operations of IOI Central Boulevard Towers in Singapore, the property developer said in its earnings announcement. IOI Central Boulevard Towers is a significant new office development in Singapore's Marina Bay area, comprising two towers: the 48-storey West Tower and the 16-storey East Tower, along with a seven-story podium. 'While challenges in the global business environment and trade uncertainty persist, we remain confident that our diversified product offerings across three countries, sizeable recurring income stream from our established property investment portfolio, and the favourable outlook of the hospitality and leisure segment provides the group with a solid foundation for sustained earnings ahead,' IOIProp's group chief executive officer Lee Yeow Seng said in a statement. For its third quarter ended March 31, IOIProp reported net profit of RM76.13mil compared with RM220.21mil in the same quarter a year ago. Revenue for the quarter came in at RM755.16mil compared with RM902.19mil reported in the same quarter a year ago.
The Star
27-04-2025
- Business
- The Star
IOIProp to cash in on Johor landbank
IOI Properties Group Bhd (IOIProp) is poised for long-term growth, supported by the recent improvement in relations between Johor and Singapore. The recent announcement of the Johor-Singapore Special Economic Zone (JS-SEZ) and the rapid transit system link (RTS Link) project are tangible signs of warming relations that have been buzzing in the news recently.
