IOI Properties may book massive income from premium land sale, analysts say as stock rises

KUALA LUMPUR (Feb 5): IOI Properties Group Bhd (KL:IOIPG) may book a massive income gain from industrial land to be sold at a large premium, analysts said, sending its stock higher on Thursday.

The proposed sale of 136 acres of land at its IOI Industrial Park @ Banting could provide a 33%-42% boost to net profit for the financial year ending June 2027 (FY2027), according to TA Securities and Hong Leong Investment Bank. The deal’s gross margin is about 60%, according to their estimates.

“We believe the premium is justified by the park’s infrastructure-ready status, strong connectivity to KLIA and Port Klang, and its suitability for data centre developments, where speed to market and delivery certainty are critical,” said TA Securities.

Shares of IOI Properties rose as much as nine sen or nearly 3% to RM3.26, an all-time high since its listing in 2014. The property developer has rallied more than 20% since the start of the year.

The RM741 million land sale to Bridge Data Centres announced on Wednesday, however, isn’t a full disposal. The company still has another 186 acres of land in Banting that could be developed or sold.

“We expect the remaining land bank to deliver attractive margins, particularly now that the park has secured Bridge as a flagship occupier and early buyer, which should further enhance its marketability and pricing power,” Hong Leong Investment said.

Further, IOI Properties is in active negotiations for land sale within the 1,100-acre IOI Industrial Park @ Iskandar Malaysia that could also be expanded to cater to the strong demand for industrial properties in Kulai and the Johor-Singapore Special Economic Zone, the research house added.

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