IOI Eyes $500M REIT

IOI Properties Group has filed plans for a Malaysian real estate investment trust that could raise about 1.98 billion ringgit, or roughly $500 million. (bloomberg.com) The April 11 filing says the trust would hold retail, hotel and office properties valued at about 7.58 billion ringgit, including IOI City Mall and W Kuala Lumpur. The company is targeting a Main Market listing on Bursa Malaysia Securities. (thestar.com.my) IOI Properties said the structure would start with 5.5 billion units at an indicative price of 90 sen each, with up to 2.2 billion units offered to investors. The rest of the consideration includes about 2.65 billion ringgit in cash. (freemalaysiatoday.com) A real estate investment trust is a listed vehicle that owns income-producing property and pays out rental income to unit holders. For developers like IOI Properties, it can turn completed malls, hotels and offices into cash while keeping a controlling stake in the platform. (freemalaysiatoday.com) IOI Properties said the proceeds would be used to repay borrowings, fund development and investment, and increase debt headroom. The company said it expects to retain a 60% stake after the listing. (freemalaysiatoday.com) The move comes after IOI Properties reported a net gearing ratio of 0.70 times for the financial year ended June 30, 2024, with borrowings concentrated in Singapore projects including IOI Central Boulevard Towers and Marina View. The group reported total assets of 46.08 billion ringgit and cash of 2.22 billion ringgit for that year. (ioiproperties.com.my) The company has been adding to its investment-property base in Singapore as well. A report in The Edge Singapore said IOI Properties recently bought out City Developments’ stake in South Beach for S$834.2 million in cash. (theedgesingapore.com) The proposed trust is expected to be completed in the fourth quarter of 2026, subject to shareholder, regulatory and government approvals. Maybank Investment Bank and AmInvestment Bank are acting as principal advisers, according to the filing. (freemalaysiatoday.com)