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KUALA LUMPUR (April 15): IOI Properties Group Bhd (KL:IOIPG) extended its rally to new highs on Wednesday as investors kept piling into bets of potential asset spin-offs by the property developer.
Once its Malaysian assets are listed through a planned real estate investment trust (REIT), the focus is likely to shift towards IOI Properties’ portfolio in Singapore worth more than thrice the value of its home market, according to Hong Leong Investment Bank in a note.
“This is further underpinned by a structural upcycle in the Singapore office market, with tight supply and strong demand supporting the future rental reversion,” the research house said.
Shares of IOI Properties climbed to as high as RM3.96 on Wednesday, up 19 sen or 5.04% from the previous day. The counter later pared its gains to close three sen or 0.80% higher at RM3.80, valuing it at RM20.92 billion.
The stock has gained 14% since the company announced last week a proposal to list a REIT comprising retail, office and hotel assets in Malaysia worth a total of RM7.58 billion.
IOI Properties has gained 44% since the year began, a rally that has added RM6.4 billion to its market value.
The counter currently has six ‘buy’ calls and three ‘hold’ recommendations, according to research houses tracked by Bloomberg. The consensus 12-month target price is RM4.04.
IOI Properties could monetise its Singapore assets with a full REIT listing by 2029, a phased approach by listing some assets first, or through a private commercial real estate fund 2027, according to Hong Leong Investment.
“While a REIT listing would depend on favourable interest rate conditions and yield compression, a private fund could capitalise on near-term capital inflows into stable markets like Singapore amid geopolitical uncertainty,” the house noted.
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