Sime Darby Property sees its FY24 sales target being revised upwards from RM3 billion to RM3.5 billion, driven by strong sales momentum in the first half of the year.
Bookings as of August 2024 have reached RM2.2 billion, and the outlook remains positive for achieving or surpassing the revised target. Analysts said despite falling short on profit guarantees from the Battersea Power Station project, the impact under International Financial Reporting Standards 17 (IFRS 17) is anticipated to be minimal. SimeProp also plans to expand its operations by leasing additional data centres and advancing its SHIFT25 strategy.
One analyst maintained the MARKET PERFORM meanwhile another analyst put BUY call, with a target price (TP) of RM1.36 and RM2.00 respectively. The SHIFT25 strategy focuses on enhancing recurring income through initiatives such as Engine 1, 2, and 3, and exploring new business segments including affordable housing. SimeProp's approach to its data centre project involves Google leasing the facility, which is expected to enhance the value of adjacent land and create further benefits within Elmina Business Park.
Management's briefing highlighted that losses from the Battersea Power Station project are considered non-recurring, and future losses are expected to be minimal. Leasing prospects for 50 Electric Boulevard are promising, with notable commitments from SharkNinja and a global marketing agency. SimeProp aims for 80% occupancy of the office tower by the end of 2025.
In addition, SimeProp's retail portfolio is gaining strength. The recently opened Elmina Lakeside Mall is 98% committed, reflecting strong execution. KL East Mall has achieved a 96% occupancy rate and is now providing a yield of 6.5-7%. The high occupancy rate at Elmina Lakeside Mall is expected to yield similar returns in a shorter time frame.
Looking ahead, analysts say that SimeProp is likely to continue exploring opportunities in the data centre sector and may collaborate with its sister company, SD Guthrie, to further industrial development. SD Guthrie's plan to develop 10,000 acres of estate land in West Malaysia could provide long-term growth prospects for SimeProp.