IOI Properties records revenue of RM1.25 bil for 6M FY2024

• The group noted that though “revenue in the property development segment has declined by 16%, the contraction is partially offset by the impressive performance observed in our property investment segment which improved by 25%”.

PUTRAJAYA (Feb 28): IOI Properties Group Bhd recorded revenue of RM1.25 billion for first half of financial year 2024 (6M FY2024) which ended on Dec 31, 2023.

The group noted that though “revenue in the property development segment has declined by 16%, the contraction is partially offset by the impressive performance observed in our property investment segment which improved by 25%”.

Profit before tax in 6M FY2024 was lower by 65% to RM405.0 million compared to RM1.16 billion reported in 6M FY2023. Excluding fair value gain, reversal of inventories written down and impairment loss, the underlying PBT in 6M FY2023 derived at RM534.7 million, of which the current quarter PBT stands at 24% lower. “The PBT is largely due to the weaker contribution from our property development segment in Malaysia and the People’s Republic of China recording lower sales. Nevertheless, the weaker performance of our property development segment is partially offset by the better performing property investment segment,” stated IOI Properties in a media release.

“We take cognisant that the operating environment both within and outside Malaysia will continue to face some headwinds. However, our wide property product offerings diversified across three countries, recurring earnings from established property investment portfolios and improving prospects for our hospitality and leisure segment will continue to provide IOIPG with a strong foundation for sustained earnings ahead,” said Lee Yeow Seng, group chief executive officer of IOI Properties.

In 6M FY2024, the property development segment achieved sales of RM1.17 billion. Local projects contributed the majority of the sales, amounting to RM1.11 billion or 95% of the total sales, while overseas projects in PRC contributed RM47.4 million, accounting to 4% of total sales, and Singapore contributed the remaining RM13.9 million or 1%.

Within Malaysia, sales secured were primarily driven by the Johor region at RM543.2 million, led by the sale of two land parcels in Johor and Melaka while established townships at Bandar Putra Kulai and Taman Kempas Utama continued to outperform.

“The land sales bode well for I IOI Properties as it allows swift monetisation of land bank which has no immediate development plan and the cash proceeds can be utilised for working capital purposes,” stated the group. Additionally, on Jan 11 2024, Malaysia and Singapore signed a memorandum of understanding to establish the Johor - Singapore Special Economic Zone to strengthen the economic connectivity between Johor and Singapore. This strategic initiative will facilitate cross-border flow of goods and people as well as strengthen the business ecosystem within JS-SEZ to support investments.

Over in Klang Valley region, on-going projects registered sales of RM425.3 million led by our integrated development at IOI Resort City in Putrajaya and the established township at Bandar Puteri Puchong in Selangor. RM1.94 billion worth of properties were launched during the period.

“IOI Properties will continue to monitor the market and strategically time our launches to achieve a good take-up rate and maximise returns for IOIPG and its shareholders. Additionally, IOI Properties remains focused on monetising completed inventories with more promotional sales campaigns,” said Lee.

Upcoming launches feature COVO Residences, a transit-oriented development serviced apartment situated in 16 Sierra @ Puchong South. Other launches include 2Rio Residence, a strategically located serviced apartment in Bandar Puteri Puchong.

IOI City Mall maintains “its stellar performance for our property investment segment, as it solidifies its reputation as the premier destination for retail, entertainment and dining activities,” stated IOI Properties.

The pickup in tourism-related activities have notably benefitted its hospitality and leisure segment, where Le Meridien in Putrajaya continues to attract travellers because of proximity to IOI City Mall.

Additionally, the recently refurbished Palm Garden Hotel, A Tribute Portfolio Hotel, and the recent launch of Moxy Putrajaya position the hotels favourably to capitalise on the anticipated tourism receipts. Furthermore, the group has recently completed the acquisition of W Kuala Lumpur in February 2024, while the acquisition of Courtyard by Marriott Penang is expected to complete in April 2024. These assets will strengthen its portfolio of hotels with immediate recurring income stream and boost our hospitality and leisure segment.

Despite challenges in PRC, IOI Properties continue to strategically position its developments at IOI Palm City and IOI Palm International Parkhouse in Xiamen as completed projects with immediate delivery, providing greater confidence to the Chinese purchasers who seek properties for immediate use. Furthermore, IOI Business Park Xiamen, which is expected to be completed in March 2024, boasting a net lettable area of 371,000 sq fe and committed tenancy rate at 100%, will bring higher footfalls and provide more business activities to complement IOI Mall Xiamen.

In Singapore, IOI Central Boulevard Towers, a premium grade A office building is slated to receive the first phase of Temporary Occupation Permit in the third quarter of FY2024. To-date, the towers have secured leases with internationally renowned companies spanning from various industries, including technology, financial services, asset management, FMCG and legal firms.

Additionally, the group will focus on the launch of Marina View Residences, being an integrated development with an international branded luxury hotel. Positioned on a prime address, the development is expected to attract resilient demand from Singaporean buyers who have strong purchasing power.