Things are looking better at IOI Properties with sales outlook for FY24 will be driven by local and Singapore projects the launch of Marina View in Singapore with GDV of SGD2.6b is expected to boost new sales of IOI Properties in FY24 in view of the improving property market in Singapore.
Besides, sales of completed inventories in China will further propel new sales growth in FY24 said MIDF after its briefing session with the property group. IOI Properties recorded new sales of RM1.37b in 9MFY23, on track to match new sales of RM1.9b in FY22. In a nutshell, we expect new property sales to be higher at >RM2b in FY24.
The group added its property investment division is expected to continue stage earnings recovery in FY24. The growth of the division should mainly be underpinned by the higher rental income from IOI City Mall in Putrajaya following the opening of phase 2. The house noted that IOI City Mall has strong shopper footfall and the house expects rental reversion for the mall to be in positive territory. Besides, the contribution from IOI Xiamen Mall should also support the earnings growth of the property investment division.
The size of IOI Properties investment properties has been growing in the past few years with the completion of IOI City Mall, IOI City Mall Phase 2, and IOI Mall in Xiamen. Note that IOI Properties has 8 retail assets with a market value of RM4.6b and 4 office towers with a market value of RM1.2b. Meanwhile, IOI Properties has two offices under construction which are IOI Central Boulevard in Singapore and IOI Palm City in Xiamen China which collectively have indicative market value of RM13.6b. That gives the total market value of investment properties of >RM19b. The group is looking to list its investment properties under REIT in the long term to unlock the value of its investment properties. If that materialises, the REIT will be the largest REIT in Malaysia in terms of asset size. Nevertheless, MIDF reckons that the listing of REIT may not be in the short-term as IOI Properties could fetch a better yield for IOI Central Boulevard in Singapore after one round of 3- a year tenancy cycle.
Stock call is BUY with a revised TP of RM1.38, MIDF remains positive on IOI Properties as it sees a stable long-term prospect due to the stable outlook for the property development division and property investment division.
