Broker: UOB Kay Hian
Date of Report: 27 August 2025

IOI Properties Group Delivers Strong 4QFY25 Results and Historic Dividend: What Investors Need to Know

Overview: IOI Properties Group’s Performance and Market Outlook

IOI Properties Group Berhad (IOIPG), a major Malaysian property developer, reported solid 4QFY25 results, surprising the market with its highest dividend since FY16. As the company maintains its BUY rating, the investment case is underpinned by resilient property and industrial sales, positive momentum from the Johor-Singapore Special Economic Zone (JS-SEZ), and upcoming REIT listings. This article provides a comprehensive breakdown of IOIPG’s recent financial performance, strategic initiatives, and outlook for investors.

Company Snapshot: IOI Properties Group

Sector: Real Estate
Share Price: RM2.10
Target Price: RM2.72 (Up from RM2.70)
Market Cap: RM11,562.9m (US$2,741.0m)
Shares Issued: 5,506.1m
Major Shareholders: Vertical Capacity (65.7%), Employees Provident Fund (6.8%)
FY26 NAV/Share: RM1.25
Net Debt/Share: RM0.41
52-Week Range: RM2.46 / RM1.63

4QFY25 Financial Performance: Key Highlights

The fourth quarter of FY25 was largely in line with expectations, but IOIPG surprised with a record-high dividend payout. Here’s how the numbers stack up:

Dividend Declared: 8 sen per share for FY25 (vs 5 sen in FY24) — highest since FY16.
FY25 Core PATAMI: RM387m, down 45% year-on-year, but in line with consensus at 95-96% of forecasts.

Business Segment Performance and Strategic Initiatives

Resilient Property and Industrial Sales Driven by JS-SEZ

FY25 sales reached RM1.8 billion (down 16% YoY), slightly below the RM2 billion target due to absence of land sales (FY24: RM365m).
Excluding land sales, FY25 sales grew 2% YoY, led by stronger sales in Johor.
The quarter saw a 52% QoQ jump in sales, especially for landed homes in Kulai and 16 Sierra (Klang Valley).
IOIPG continues to leverage JS-SEZ demand with RM6.8 billion in gross development value (GDV) for Johor as of end-June 2025.
Management is optimistic about finalizing a significant industrial land sale in 1HFY26.

Marina View: A Key Swing Factor

Marina View’s official launch is planned for October 2025, with a phased approach.
Current average pricing stands at S$5,000 psf, but limited take-up may prompt a pricing strategy adjustment.
IOIPG is seeking a one-year extension to the ABSD deadline (September 2026) to avoid a S$275 million penalty. Approval is likely based on industry precedents.

IOI Central Boulevard Towers (IOICB) and Property Investment

Commitment rate for IOICB improved to 88% by end-July 2025 (from 85% in June).
4QFY25 property investment revenue rose to RM242m (+23% YoY), thanks to higher occupancy at IOICB, IOI City Mall, and contributions from IOI Mall Damansara.
Operating profit from property investment fell to RM68m (down 25% YoY), mainly due to a one-off leasing commission expense (~RM30m).
Going forward, leasing commissions will be expensed immediately rather than capitalized.

Hospitality and Leisure: On the Verge of Profitability

4QFY25 revenue in this segment grew to RM118m.
Operating loss narrowed to RM1m (vs RM11m loss in 3QFY25).
The segment is expected to turn profitable in 1QFY26, supported by strong summer holiday demand and higher occupancy rates.

Key Financials and Forecasts

Net margin is expected to expand from 12.6% in FY25 to 20.0% by FY28.
Leverage: Net debt/equity projected to decrease from 69.5% (FY25) to 62.4% (FY28).
Interest cover improves gradually, supporting IOIPG’s ability to manage its debt.

Valuation and Recommendation

Target Price Raised: RM2.72 (from RM2.70) — based on a 45% discount to RNAV of RM4.94 per share.
Implied Valuations: Target price implies 0.6x FY26F P/B (+1 SD above 10-year mean) and 22.5x FY26F PE.
BUY rating maintained — IOIPG is well-positioned to benefit from falling interest rates and upcoming REIT listings in both Malaysia and Singapore.
High Gearing: 0.93x following stake acquisition in South Beach Development, but balance sheet supported by REIT plans.

RNAV Breakdown and Borrowings Profile

Borrowings Mix (as of end-June 2025): Singapore 79.0%, Malaysia 13.8%, China 7.2%.

Environmental, Social, and Governance (ESG) Updates

Environmental: Target to reduce Scope 2 emissions intensity in property investment operations by 15% by 2025 and 18% by 2028 (baseline: FY2021).
Social: Commitment to local procurement within the supply chain.
Governance: 33% women representation on the Board of Directors.

Investment Risks and Earnings Revision

Earnings Adjustments: FY26/27F earnings revised upward by 1.5%/1.1%, FY28F introduced.
Key Risks: Delay in JS-SEZ land sales, further slowdown in Marina View take-up, and potential interest rate volatility.
Mitigants: Strong pipeline, REIT listings to support balance sheet, and likely ABSD extension for Marina View.

Conclusion: IOI Properties Group Set for Recovery and Dividend Growth

IOI Properties Group has emerged from a challenging year with resilient sales performance and a record-high dividend, signaling confidence in its future prospects. With the tailwinds from the JS-SEZ, strategic launches, and REIT plans, the company remains well-positioned for growth and offers an attractive investment case as interest rates ease. Investors looking for a diversified real estate play in Malaysia and Singapore should keep IOIPG firmly on their radar.