Sime Darby Property Bhd is experiencing robust growth in the Elmina township, supported by a strategic location and significant investments.

Following a recent site visit to the Elmina township and Elmina Business Park (EBP), RHB Investment Bank Bhd (RHB Research) has maintained a BUY recommendation for Sime Darby Property, raising the target price to RM2.20 from RM2, suggesting a potential upside of 50%.

The positive outlook for Sime Darby Property is underpinned by the strong demand in the business park, particularly following Google LLC's announcement of a data centre investment in the area.

The Elmina development spans 2,630ha of freehold land with a gross development value of RM30 billion and features 12,535 completed residential units catering to a population of 67,000.

RHB Research noted that Sime Darby Property's Elmina township and EBP have become critical contributors to property sales, accounting for 25%-30% of annual sales.

Sales figures have steadily increased over the past three years, with reported earnings of RM788.7 million in FY22, RM993 million in FY23 and RM501.6 million in the first half of FY24. The positive trajectory is likely to continue, supported by the rapid development of infrastructure and commercial elements in the township.

Construction at the Google data centre is progressing on schedule, with completion expected in the third quarter of 2026.

However, available land at EBP for built-to-suit projects is rapidly diminishing, with only 15.38ha remaining in EBP 1. As such, Sime Darby Property is faced with the challenge of managing significant demand while being selective in the industries it attracts.

The company is also preparing to activate infrastructure and ground works for EBP 2, which could accommodate additional factories and data centres in the future. This strategic approach positions Sime Darby Property well for sustained growth and profitability in the years ahead.