RHB Investment Bank Bhd (RHB Research) has maintained a BUY call on Sime Darby Property Bhd with a target price of RM2.33, implying a 76% upside and a 3% FY26F dividend yield, citing the company’s ongoing strategy to expand its investment property portfolio and the awarding of a second data centre contract to IJM.
Analysts noted that the timely contract award reinforces confidence that the construction of both data centres at Elmina Business Park (EBP) remains on track, with leasing income expected to commence in late 2026.
Sime Darby Property awarded the Package 2 contract to IJM for RM658.01 million, extending works from Package 1, which was valued at RM1.3 billion and awarded in October 2025. Package 2 construction is slated to begin in 2Q26, with both projects scheduled for completion by 3Q27. The contracts were awarded through a tender process involving four participating contractors, with IJM selected based on commercial, technical and capacity evaluations, alongside performance on Package 1.
Analysts highlighted that DC 1 and DC 2 have lease values of RM2 billion and RM5.6 billion over the initial 20 years and the maiden income contribution from DC 1 is expected to raise SDPR’s FY27 earnings, with estimated net income of RM40–50 million per annum in the early years, after accounting for interest costs. The award also supports investor confidence amid equity market volatility caused by the Middle East conflict.
RHB further noted that Sime Darby Property may refine its stake in DC 2 to balance funding for other industrial property developments, while the company is also targeting a potential REIT listing of its industrial investment properties next year, which could serve as a significant rerating catalyst for the stock.
As of 11.05 am, the stock price decreased 2.27% to RM1.29.
