Spore assets to lift IOI Properties income in FY2025/2026

KUALA LUMPUR: IOI Properties Group Bhd (IOIPG) is poised to capitalise on its Singapore real estate ventures, with IOI Central Boulevard (IOICB) expected to contribute in the financial year 2025 (FY2025) and Marina View Residences in FY2026, according to Hong Leong Investment Bank Bhd (HLIB).

In a note today, it said the group is a formidable force in the real estate market as the value of its property investment and hospitality assets are estimated to swell to above RM30 billion when the development of IOICB is completed while its landbank size remains sizeable at 3,318 hectares (8,200 acres).

Additionally, HLIB said substantial revaluation gains are anticipated from IOICB, potentially constituting 50-67 per cent of the current share price.

"IOIPG's chief executive officer Lee Yeow Seng estimated IOICB's market value at SG$6 billion (RM21 billion), which aligns with our estimated range of S$5.15–S$6.86 billion.

"This could result in a substantial revaluation gain of RM6-8 billion, translating to a RM1.09 to RM1.45 earnings per share," it said.

HLIB said Marina View Residences is undergoing design revisions for a branded residence concept with Marriott International, delaying its launch. Gross development value has risen to S$3.5 billion, potentially attracting niche affluent buyers.

"There is potential upside surprise, positioning Marina View as a Veblen good with demand rising in tandem with price.

"Based on a 20-25 per cent net profit range and a 70-100 per cent takeup rate by September 2028, its potential net profit is estimated to be in the RM840 million-RM3.06 billion, or RM280 million to RM1.02 billion per annum over a three-year development period, significantly lifting earnings between FY2026-2028," it said.

Hence, HLIB has increased IOIPG's financial year 2026 forecast by 10.2 per cent to account for higher contribution from Marina View. It maintains a 'buy' call with a target price of RM3.30.

In the hospitality sector, it said IOIPG is set to ride on the post-pandemic hospitality boom, with its hotel room inventory expanding by 64 per cent in 2024 and refurbishments expected to raise room rates, leading to a projected sharp turnaround from a loss before interest and tax of RM5.1 million recorded in the first half of 2024, it added.