Prioritising stability amid expansion
IOI Properties Group Bhd (KL:IOIPG) ended its financial year ended June 30, 2025 (FY2025) with mixed results, posting RM3.06 billion in revenue, up 4% compared to RM2.94 billion in FY2024. According to its integrated annual report 2025, the higher revenue was primarily driven by improved performance in the property investment and hospitality and leisure segments, which helped offset the softer contribution from the property development segment.
In the same year, the group recorded a profit before tax (PBT) of RM1.45 billion, down from RM2.3 billion in FY2024. The report states that the lower profit was mainly because the group recorded smaller one-off gains from the revaluation of its investment properties and had to bear higher interest expenses. These costs rose following the start of operations at IOI Central Boulevard Towers in Singapore in April 2024.
At the same time, the group managed to reduce completed unsold inventories by a third from RM1.92 billion in FY2024 to RM1.27 billion in FY2025. Despite its ongoing expansions, the group maintained a gearing ratio of 0.7 times, with total borrowings of RM19.6 billion.
The property investment segment recorded strong growth with higher rental income from its malls and offices while the hospitality and leisure segment improved sharply as hotel operations turned around following recent acquisitions and refurbishments. Although property development revenue dipped slightly due to fewer land sales, profit margins remained stable, thanks to steady demand for affordable and mid-range homes.
In an email interview with City & Country, group CEO Lee Yeow Seng talks about IOI Properties’ plans to expand its property development portfolio locally and abroad as well as strategies to grow the company’s recurring income stream.
City & Country: Please share some of the company’s highlights for FY2025.
Lee Yeow Seng: IOI Properties achieved a revenue milestone of RM3.06 billion in FY2025. This was due to our remarkable growth in the property investment and hospitality and leisure segments, on top of the resilient property development segment.
We undertook a strategic transformation of our core businesses to achieve a more balanced and resilient revenue composition for long-term stability.
Historically, property development contributed over 80% of revenue, with property investment and hospitality and leisure contributing the rest. As of FY2025, our revenue composition reflected our achievement with property development at 54%, property investment at 31% and hospitality and leisure at 15%.
The property development segment demonstrated strategic launches, capitalising on demand for affordably priced products, especially in the Klang Valley. The projects include COVO in 16 Sierra, Puchong; Gems Residence in IOI Resort City, Putrajaya; 2Rio Xchange in Bandar Puteri Puchong and a few projects at Bandar Putra Kulai in Johor.
In response to the growing demand for industrial facilities, we launched the IOI Industrial Park Series in September 2024, comprising projects in Banting, Iskandar Malaysia and Melaka.
In the property investment segment, IOI City Mall in Putrajaya continued its noteworthy retail performance with 99% occupancy and strong footfall. The acquisition and rebranding of Tropicana Gardens Mall to IOI Mall Damansara in Kota Damansara will expand our recurring income base.
In the office sub-segment, IOI City Tower 1 is fully leased, while proactive maintenance, green retrofits and digital operations sustain performance across both IOI City Towers. The hospitality and leisure segment saw robust growth from newly acquired and refurbished hotels, namely W Kuala Lumpur, Courtyard by Marriott Penang and Moxy Putrajaya, which transitioned into profitability, while the renovated Putrajaya Marriott Hotel delivered improved yields.
Singapore remains a key pillar of our regional growth. IOI Central Boulevard Towers maintained a high occupancy rate of 94% as at September 2025. We completed the acquisition of City Developments Ltd’s remaining 50.1% stake in the South Beach mixed-use development for S$835.29 million (RM2.75 billion) on Sept 1, 2025.
Additionally, construction of W Residences Marina View in the Marina Bay district in Singapore is progressing well and has reached the 16th floor, further cementing our urban core presence.
In the People’s Republic of China (PRC), market conditions remained subdued despite stimulus measures and we continued to emphasise our completed inventories at IOI Palm City and IOI Palm International Parkhouse through selective price adjustments and enhanced marketing.
The Sheraton Grand Xiamen Jimei held its grand opening in March 2025, completing the group’s three-segmental offerings in Xiamen alongside IOI Mall Xiamen and IOI Business Park. This diversification strengthens our integrated development’s long-term positioning and establishes a diversified income base in the PRC.
Besides strengthening our business model, the group strategises and plans out how to unlock value and monetise assets, which brings the assessments of real estate investment trusts (REITs) to the table.
The group plans to launch more than RM2 billion worth of properties in Malaysia in FY2026. What are your strategies for these upcoming launches?
For FY2026, the group plans projects and development launches with an estimated GDV of RM2.5 billion across the Klang Valley region and Johor.
Upcoming launches in the Klang Valley will feature a mix of residential and commercial products in areas like Bandar Puteri Puchong; Warisan Puteri, Sepang; Bandar Puteri Bangi and Senna Puteri, Sepang.
Strategic industrial launches with an estimated GDV of RM1 billion are planned at IOI Industrial Park at Banting and IOI Industrial Park at Iskandar Malaysia, offering detached and semi-detached factory units and land plots.
In Johor, the group is leveraging key catalytic initiatives like the Johor-Singapore Special Economic Zone (JS-SEZ) and expanded rail infrastructure. Launches will be strategically tailored with market-driven products in Bandar Putra Kulai, Taman Kempas Utama and Bandar IOI Segamat.
Furthermore, IOI Industrial Park at Iskandar Malaysia will capitalise on anticipated industrial demand due to its proximity to Senai Airport. Overall, the group remains cautiously optimistic about its property development segment in Malaysia. This outlook is supported by the maintained overnight policy rate of 2.75% since July 2025 for property financing, full stamp duty exemptions for first-time homebuyers extended to Dec 31, 2025, and the recently announced tax relief initiatives.
However, factors such as rising operational costs — including minimum wages, foreign workers’ EPF requirements, expanded SST scope and the revamped electricity tariff structure — will continue to influence our strategies in 2026. In addition, geopolitical challenges, including imposed tariffs and foreign exchange volatility, will remain key considerations.
Recurring income has been a key focus for IOI Properties Group in FY2025. How does the company plan to grow and stabilise its recurring income base over the next few years?
The strategic growth transformation over the past two years, including the mentioned acquisitions, has brought about positive outcomes, and it is expected to provide stability and sustained earnings for the group over time.
In our IOI Malls’ plans, IOI City Mall in Putrajaya will expand its net lettable area (NLA) by one million sq ft in its Phase 3 expansion and IOI Mall Rio, a one million sq ft mall in Puchong, will be launched, both in 2030.
IOI Mall Damansara is currently undergoing asset enhancement initiatives and it is expected to contribute in a couple of years. Also, IOI Mall Puchong and IOI Mall Kulai are continuously improving their tenant mix and optimising their NLA spaces.
In the offices sub-segment, IOI City Towers 1 and 2 upgraded to a GBI Silver rating this year and achieved a committed occupancy of 80%. Puchong Financial Corporate Centre Towers 4 and 5 have achieved 90% occupancy while Towers 1 and 2 are undergoing retrofits and facility upgrades to better serve corporate tenants and tech-driven companies.
The acquisition of the remaining 50.1% stake in Singapore’s South Beach and the 94% lease commitment at IOI Central Boulevard Towers (as at Sept 30, 2025) will bolster the group’s recurring income in Malaysia and Singapore.
The group’s hospitality and leisure segment’s portfolio features nine hotels with a combined total of 3,075 rooms. Acquired hotels, namely W Kuala Lumpur and Courtyard by Marriott Penang and the newly opened Moxy Putrajaya, continued to strengthen the group’s recurring income pillar in FY2025.
The portfolio is set to grow to 3,658 rooms with the upcoming W Singapore in Marina View offering 360 rooms and W Langkawi comprising 223 rooms by 2029. Again, the imperative question would be how to monetise these for long-term growth and opportunities; thus, the REITs’ consideration and evaluations.
Johor has emerged as one of IOI Properties Group’s key growth markets. What are your plans for the state and how do you plan to leverage the upcoming catalytic projects?
Our southern region delivered strong sales in FY2025, registering RM663.76 million, largely from Bandar Putra Kulai and Taman Kempas Utama. The successful “30 Years Together” campaign across selected projects and developments in Johor generated RM437 million in sales in three months this year, driven by a strategic pipeline across Bandar IOI Segamat, Bandar Putra Kulai and IOI Industrial Park at Iskandar Malaysia.
Moving forward, we remain committed to leveraging catalytic initiatives in Johor, specifically in Bandar Putra Kulai and IOI Industrial Park at Iskandar Malaysia, as both are strategically situated in the Senai-Kulai district within the JS-SEZ, focusing on high-value investments for manufacturing, logistics, tourism and the digital economy.
The spillover effects from these industries will benefit not only the group’s industrial offerings but also the group’s expected expansion of its hospitality and leisure businesses in Bandar Putra Kulai and other parts of Johor, as well as provide marketable and well-priced residential products to meet the anticipated demand over time.
IOI Properties has a presence in both Singapore and China. What are your upcoming plans in these countries, and how do you plan to navigate these markets amid the current challenging global economic landscape?
In the PRC, we remain focused on stabilising operations amid a challenging market by leveraging ready-to-move-in units within our projects and integrated development. This strategy capitalises on key assets like the recently completed IOI Business Park, comprising 10 four-storey office buildings and the Sheraton Grand Xiamen Jimei, a 370-room hotel.
Singapore remains a critical anchor for our regional strategy. Our flagship IOI Central Boulevard Towers (BCA Green Mark Platinum, Premium Grade A) achieved a 94% lease commitment rate as at Sept 30, 2025.
The upcoming 51-storey Marina View mixed-use development, featuring W Residences Marina View (683 residential units) and the W Singapore (360 hotel rooms), is strategically significant as the first hotel-home concept in the city state, reinforcing our focus on delivering iconic assets of enduring value that are distinguished from the rest.
What is your market outlook for 2026 and what challenges do you foresee the industry facing?
The group’s outlook for FY2026 and beyond is cautiously optimistic, anchored by our diversified presence across three countries and a resilient recurring income base. We will focus on delivering operational excellence, prudent capital management and disciplined execution across all segments and countries.
These will be supported by monetising completed inventories and upcoming launches that will drive long-term growth, including the IOI Industrial Park Series; the Phase 3 expansion of IOI City Mall; IOI Rio City, comprising the final 100-acre master-planned development of Bandar Puteri Puchong, complete with a one million sq ft IOI Mall Rio; and the W Residences Marina View in Singapore.
Construction of W Singapore and W Langkawi is on track for targeted completion in 2029. We will continue to institutionalise environmental, social and governance policies across all operations to support our nation’s net zero objective and deepen our presence in core markets, specifically Singapore, as a key growth engine for long-term value.