IOI Properties Making Tangible Progress In Deleveraging

Hong Leong Investment Bank Bhd (HLIB) maintained its BUY rating on IOI Properties Group Bhd (IOIPG) with an unchanged target price of RM4.15, highlighting that a recent industrial land sale could lift FY27 earnings by 32.6%.

HLIB said the transaction at IOI Industrial Park @ Banting is expected to deliver a gross profit margin of around 60%, translating into an estimated net profit of RM337.8 million.

IOIPG announced on Jan 29 that it had agreed to sell three plots of land totalling 136.03 acres to Bridge Data Centres for RM740.68 million, implying a selling price of RM125 per square foot. Completion is expected within 9–12 months, likely in 2QFY27–3QFY27.

HLIB noted that the proceeds would reduce the group’s net gearing from 94.2% to 91.2%, marking tangible progress in deleveraging, with further reduction anticipated from its planned Malaysia REIT listing in 3QCY26.

The industrial segment has gained traction following the launch of the 322-acre IOI Industrial Park @ Banting in December 2025.

HLIB said the sale of 42.2% of the park reflects strong initial take-up momentum, with the remaining landbank expected to deliver attractive margins, particularly with Bridge DC as a flagship occupier.

IOIPG is also evaluating two build-to-lease logistics warehouse facilities, which could broaden recurring income streams amid projected growth in Malaysia’s freight and logistics market to US$38.28 billion by 2030.

HLIB emphasised that the company’s diversified footprint, spanning Malaysia and Singapore, provides both defensive stability and growth potential.

The research house highlighted that IOIPG’s strategic positioning and structural expansion in Malaysia’s property sector could enhance its prospects for inclusion in the FBM KLCI index, further strengthening its investment appeal.

As of 11.34 am, IOIPG’s stock price increased 1.89% to RM3.23.