IOI Properties Group Bhd (IOIPG) is seeking shareholders’ approval for a RM7.58 billion disposal of a portfolio of retail, hotel and office properties to its newly established IOIPG Malaysia Real Estate Investment Trust (IOIPG REIT), ahead of the REIT’s proposed listing on Bursa Malaysia’s Main Market.
According to a circular dated Sept 15, the disposal consideration will be satisfied through the issuance of 5.5 billion IOIPG REIT units worth about RM4.92 billion and approximately RM2.65 billion in cash. The cash portion will be funded through sukuk issued by IOIPG REIT.
The initial portfolio comprises IOI City Mall, six hotels — Putrajaya Marriott Hotel, Le Méridien Putrajaya, Moxy Putrajaya, Four Points by Sheraton Puchong, W Kuala Lumpur and Courtyard by Marriott Penang — as well as IOI City Towers and PFCC Towers.
IOI City Mall accounts for the largest portion of the transaction, with a disposal consideration of RM5.10 billion, followed by the hotel portfolio at RM1.50 billion and the office properties at RM980 million.
An updated independent valuation placed the portfolio’s total appraised value at RM7.66 billion as at May 31, 2026, RM86 million or 1.1% higher than its previous RM7.58 billion valuation. The disposal consideration, however, remains unchanged at RM7.58 billion.
As part of the proposed listing, IOIPG intends to offer up to 2.2 billion REIT units, comprising 715.61 million units under the retail offering and up to 1.484 billion units for institutional investors.
The institutional tranche includes 687.5 million units reserved for Bumiputera investors approved by the Ministry of Investment, Trade and Industry, with the balance offered to Malaysian and foreign institutional and selected investors.
Eligible IOIPG shareholders will also be offered one restricted offer unit for every 10 existing IOIPG shares held on an entitlement date to be determined later.
Upon completion, IOIPG is expected to retain 60% of IOIPG REIT, or 54% if an over-allotment option involving up to an additional 330 million units is fully exercised. The REIT will therefore remain a subsidiary of IOIPG and continue to be consolidated into the group’s financial statements.
Using an illustrative offer price of 91 sen per unit, IOIPG estimates gross cash proceeds of around RM4.66 billion, rising to RM4.96 billion if the over-allotment option is fully exercised. The actual proceeds will depend on the eventual institutional and retail pricing.
Of the estimated proceeds, RM1.53 billion is earmarked for debt repayment, including RM435 million of borrowings associated primarily with the acquisitions of W Kuala Lumpur and Courtyard by Marriott Penang.
A further RM3.07 billion, or up to RM3.37 billion with full exercise of the over-allotment option, is intended for project development, property investment and related activities.
IOIPG said the proposed transactions would allow it to unlock the value of matured, income-generating assets, create additional debt headroom and recycle capital into development and investment opportunities. Borrowings associated with the properties would be ring-fenced at REIT level without recourse to the wider group.
The properties contributed RM876.5 million, or 28.6%, of IOIPG Group’s revenue in FY2025, up from RM521.7 million or 20.1% in FY2023.
IOIPG REIT’s pro forma FY2025 revenue stood at RM580.95 million, with net property income of RM388.07 million. Its pro forma total assets are estimated at RM7.79 billion, with NAV of about RM5.01 billion or 91 sen per unit.
IOIPG shareholders will vote on the proposals at an extraordinary general meeting scheduled for Sept 30, 2026 at 10am.
