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PETALING JAYA (March 4): Sime Darby Property Bhd (SimeProp) has closed FY2025 with a record profit before tax (PBT) of RM803.4 million for the financial year ended Dec 31, 2025, marking the successful conclusion of its five-year SHIFT25 plan.
Revenue momentum remained firm, with total sales reaching RM4.2 billion—17% above target—supported by robust take-up across industrial and residential launches. With SHIFT25 now concluded, the group has launched a new seven-year roadmap, SHIFT32, positioning itself for a broader earnings mix anchored on industrial parks, logistics assets and digital infrastructure alongside its core township developments.
Dividend fixed; pension funds adjust positions
The board has fixed March 31, 2026 as the book closure date for a second interim single-tiered dividend of 1.70 sen per share. Shares will trade ex-dividend from March 30, with payment scheduled for April 23. This second interim distribution brings total FY2025 dividends to 3.20 sen per share.
Recent filings also reveal tactical institutional movements. Kumpulan Wang Persaraan (Diperbadankan) (KWAP) acquired 876,400 shares on Feb 27, increasing its direct interest to 442.96 million shares (6.513%).
Including indirect holdings, its total interest now stands at 7.485%. Conversely, Amanah Saham Bumiputera (ASB), via AmanahRaya Trustees Bhd, disposed of 172,500 shares but remains the dominant anchor with a 33.124% stake.
Industrial sales gain prominence
Industrial and logistics products accounted for RM1.5 billion, or 36%, of total FY2025 sales—notably exceeding the residential landed (26%) and high-rise (24%) segments.
This pivot reflects a structural surge in demand for manufacturing, warehousing and data centre-linked land within the group’s mature townships.
Research houses noted that this industrial tilt has facilitated superior cash conversion. Completed inventory stood at a lean RM191.1 million at year-end, comfortably below the group’s internal ceiling of 10% of total inventories.
MIDF Research highlighted that the 42% dividend payout ratio was underpinned by stronger operating cash flow and disciplined capital management.
Data centre development in focus
Market attention is now centred on the Elmina hyperscale data centre, scheduled for completion in 3Q2026. The facility is backed by a 20-year lease to Pearl Computing—a subsidiary of Google—with an estimated contract value of RM2 billion over the tenure.
Analysts suggest this long-term lease structure introduces significant recurring income visibility, distinguishing the asset from cyclical property sales.
Both Maybank Investment Bank and RHB Investment Bank noted that valuation frameworks are increasingly incorporating contracted lease tenures and power capacity metrics rather than relying solely on traditional sales-based assessments.
Balance sheet and cost pressures
The strategic shift towards capital-intensive digital infrastructure has lifted net gearing to 35.9%, up from approximately 30% a year earlier.
While analysts generally view this leverage as manageable, some houses maintain a cautious stance on near-term margins.
Kenanga Research and MIDF Research flagged potential cost pressures arising from the expanded Sales and Service Tax (SST) framework and diesel subsidy rationalisation, which are expected to inflate construction and logistics overheads. However, the group’s RM3.9 billion in unbilled sales provides a significant "revenue shield", with Maybank IB estimating roughly 1.1 times revenue cover through FY2027.
ESG positioning and launch pipeline
Beyond financial metrics, SimeProp continues to embed environmental, social and governance (ESG) initiatives into its core operations.
The group holds a “B” rating from CDP for climate disclosure and continues its Seed Homes programme, which focuses on delivering affordable housing formats within its townships.
For FY2026, SimeProp has outlined a RM4.7 billion gross development value (GDV) launch pipeline.
Consensus target prices range between RM1.90 and RM1.93, reflecting expectations of steady earnings supported by industrial sales and emerging recurring income streams.
Editor’s note: This report is based on SimeProp’s audited FY2025 results, filed on Feb 27.
The "so what?" for 2026: Beyond the record earnings, the real story is SimeProp’s successful decoupling from the volatile residential cycle. By pivoting to long-term digital infrastructure, the group is fundamentally altering its valuation DNA.
Institutional magnet: The shift into yield-generating assets explains the recent pivot by funds like KWAP. Investors are no longer just buying a developer; they are buying into a "land-backed infrastructure play" with predictable, bond-like cash flows.
The cost of capital: While the CDP “B” rating is an ESG win, its true value in 2026 is defensive. In a high-interest environment, this "green-coded" status acts as a financial shield, ensuring SimeProp maintains a lower cost of debt than its less-prepared peers.
The verdict: The RM3.9 billion unbilled sales provide the safety net, but the SHIFT32 strategy is the growth engine. This is a marathon transition aimed at making the group "cycle-proof" by the end of the decade.
No advice: Analyst views are for informational purposes only; they do not constitute financial advice.
Due diligence: Readers are advised to perform independent research before making investment decisions.
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