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PETALING JAYA (Feb 24): For decades, Sime Darby Property Bhd (SimeProp) was valued mainly as a township developer, with earnings driven by residential and mixed-use projects across the Klang Valley.
That image is now being quietly reshaped. Under its SHIFT25 strategy, the group is trying to expand from selling homes to collecting rent—with hyperscale data centres at Elmina Business Park leading the shift.
Elmina: Malaysia’s emerging data centre hub
Elmina Business Park, a 1,500-acre freehold industrial township in Shah Alam, Selangor, has become SimeProp’s main data centre cluster.
In May 2024, the group announced its first hyperscale facility on a 49-acre site for Pearl Computing Malaysia Sdn Bhd, a unit of Singapore-based Raiden APAC Pte Ltd.
While the end-operator was not disclosed in Bursa Malaysia filings, industry reports have linked the project to Google, which in October 2024 broke ground on its first Malaysian data centre and cloud region at Elmina.
Phase 1 is scheduled for completion in 2026 under a 20-year lease with renewal options. In December 2024, SimeProp announced a second, larger hyperscale facility on an adjacent 77-acre site, also for Pearl Computing, with completion targeted in 2027.
Taken together, the two sites lock in multi-billion-ringgit lease commitments that run far longer than a typical property cycle, anchoring a new stream of recurring income for the group.
Group managing director and CEO Datuk Seri Azmir Merican said in an earlier report the projects demonstrate SimeProp’s ability to meet hyperscaler technical requirements—effectively pushing the company beyond the limits of traditional township development.
SHIFT25: Building recurring revenue
SHIFT25 is designed to keep development earnings flowing while gradually reducing the company’s dependence on cyclical residential launches.
Data centres have become the most consequential piece of that puzzle. Lease revenue from the first Elmina facility, expected from 2026, is projected to lift investment and asset management (IAM) segment contributions beyond those from retail malls and industrial built-to-lease assets.
The management’s aim is to make recurring income a much larger slice of group revenue over time. With SHIFT25 concluding in 2025, the Elmina data centre portfolio is expected to underpin the group’s next strategic phase.
The shift is also changing how the company is assessed. Instead of focusing only on homes delivered and take-up rates, investors are increasingly looking at megawatts secured, and the length of contracted lease tenures.
Business fundamentals
Recent reporting periods show development momentum supported by a rising share of industrial and commercial sales relative to historically residential-led volumes. Unbilled sales remain elevated, providing earnings visibility over the next few financial years.
On the funding side, SimeProp maintains an AA-rated Islamic medium-term note programme, backed by the size of its landbank and operating scale.
Rating agencies have pointed to data centre leases as a stabilising anchor for cash flow, although borrowings have risen in line with capital expenditure required for long-tenure assets.
Institutional confidence
Bursa Malaysia filings show Malaysia’s two largest public pension funds—the Employees Provident Fund and Kumpulan Wang Persaraan—remain among SimeProp’s substantial shareholders.
Their presence signals continued confidence in the company’s strategic pivot. Investors are advised to refer to Bursa Malaysia disclosures for the latest shareholding positions.
Looking ahead
Lease commencement for the first Elmina data centre in 2026 will be a key operational milestone.
Upcoming quarterly results are expected to focus on delivery against SHIFT25 objectives, construction progress, and potential new hyperscale developments.
Malaysia continues to attract global technology companies due to power availability, regulatory clarity, and competitive land pricing.
SimeProp’s execution at Elmina marks a shift in its earnings profile—from units delivered, to megawatts leased, and decades of contracted income.
The market is still deciding what kind of company SimeProp is becoming: a property developer with data centres, or a data centre landlord that happens to build townships.
Market snapshot
Shares of SimeProp closed unchanged on Tuesday, stabilising at RM1.50 after the previous session’s mild decline.
The counter traded within a narrow range, touching an intraday high of RM1.50 and a low of RM1.48 before ending flat. Trading volume fell sharply to 3,937,500 shares, compared with over 15 million shares a day earlier.
Consolidation at RM1.50
The muted session suggests consolidation around the RM1.50 level following last week’s attempt to test RM1.55. The pullback in turnover indicates reduced near-term trading momentum as the stock holds within a tight band.
Market participants are likely positioning ahead of the group’s full-year earnings announcement expected in early March.
Valuation snapshot
At RM1.50, SimeProp is trading at approximately 15.9x trailing earnings and about 2.7 times price-to-book, keeping its valuation broadly in line with recent sessions.
The counter remains in focus as the group advances its diversification strategy, including initiatives linked to Malaysia’s data centre ecosystem.
Editor’s note: This article is based on publicly available Bursa Malaysia filings, company announcements, and rating agency statements as of the date of publication. Readers should conduct their own due diligence. This is not investment advice.
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