IOI Properties Group Maintains Resilience Amid Headwinds 

Press Release: IOI Properties Group Maintains Resilience Amid Headwinds 

▪ Q1 FY2025 Overall Revenue Grew by 6% to RM688 million 

▪ 52% Growth in Property Investment Segment Revenue 

▪ Hospitality & Leisure Segment Turned Profitable 

Putrajaya – IOI Properties Group Berhad (“IOIPG” or “Group”) registered a revenue of RM687.9 million for  the first quarter of financial year 2025 (“Q1 FY2025”) which ended on 30 September 2024. Although the  Property Development segment saw a 21% decline in revenue, the weaker performance was offset by the  strong performance of the Property Investment segment, which continued its growth trajectory with an  impressive 52% growth, alongside the Hospitality & Leisure segment, which saw its revenue more than  double, driven by contributions from three new additions to the portfolio, namely Moxy Hotel, W Kuala  Lumpur and Courtyard by Marriott Penang, as well as higher contributions from Palm Garden Hotel, A  Tribute Portfolio Hotel, and Putrajaya Marriott Hotel following the completion of its refurbishment works. 

Profit before tax (“PBT”) in Q1 FY2025 declined by 41% to RM133.7 million as compared to the RM225.5 million reported in Q1 FY2024. The weaker performance is primarily attributed to the interest costs  from IOI Central Boulevard Towers, which were expensed out in the profit and loss statement after partially  receiving its temporary occupation permit. Nonetheless, the higher interest costs were moderated by the improved performance of the Property Investment and Hospitality & Leisure segment. This performance underscores the Group’s ability to navigate the global economic uncertainties while maintaining stability  in all its business segments in Malaysia, Singapore and the People’s Republic of China (“PRC”). 

“While we acknowledge that the operating environment, both domestic and internationally, will  continue to face headwinds, the declining interest rates outlook bodes well for the Group. Our diversified  product offerings across three countries, sizeable recurring income stream from our established property  investment portfolio and the positive outlook of the hospitality and leisure segment will provide a solid  foundation for sustained earnings ahead.” highlighted Mr. Lee Yeow Seng, Group Chief Executive Officer  of IOIPG. 

In Q1 FY2025, the Property Development segment achieved sales of RM331.7 million where local projects  contributed RM323.2 million, accounting for 97% of the total sales. In Malaysia, sales were primarily driven  by the Klang Valley region at RM217.6 million, led by thriving and matured integrated developments,  namely IOI Resort City in Putrajaya and Bandar Puchong Jaya in Selangor. Over at the Johor region, the  registered sales of RM99.8 million was primarily attributed to the vibrant townships of Bandar Putra Kulai and Taman Kempas Utama. 

2Rio Residence was launched in January 2024 with 632 units of serviced apartments located in the heart of the bustling Bandar Puteri Puchong township.

Mr. Lee said, “We will continue to monitor the market and strategically time our launches to achieve a  good take-up rate and sustain earnings. Additionally, our concerted efforts to clear completed  inventories has yielded a further reduction of RM179.9 million, bringing the completed inventories down  to RM1.74 billion, which was partially due to foreign exchange adjustments of the completed inventories  in PRC. This enables immediate monetisation into cashflow to support the Group’s ongoing capital  commitments and working capital requirements. We remain focused on reducing the completed inventories further through strategic product positioning and promotional sales campaigns.” 

The Property Investment segment continues to outperform, bolstered by the high committed occupancy  and strong footfall of IOI City Mall. Building on the success of IOI City Mall, the acquisition of Tropicana  Gardens Mall, which is on track to complete by Q3 FY2025, is expected to continue the segment’s  expansion plans and provide additional recurring income stream. Recently, the Group unveiled IOI Mall  Rio, a mega mall with one million square feet of net lettable area comprising over 300 retail outlets, which  is expected to open by 2030. This exciting development is anticipated to be the retail catalyst for the newly  unveiled IOI Rio City in Bandar Puteri Puchong and is expected to provide stronger long-term prospects  for IOIPG’s Property Investment portfolio. 

The Hospitality & Leisure segment saw an improvement in occupancy rates across the Group’s hotels  during the quarter, driven by increased tourism activities from Tourism Malaysia’s initiatives in preparation  of the Visit Malaysia 2026 campaign. As of September 2024, Malaysia recorded a total of 18.4 million  tourist arrivals, achieving 67% of its full year target of 27.3 million and an increase of 27% compared to the  same period last year. Supported by the rise in tourism activities, the Hospitality & Leisure segment is  poised to sustain its performance ahead. 

Over in the PRC, economic challenges continue to persist, prompting the central bank to introduce its  largest stimulus package since the pandemic, with an aim to revitalise the property sector and restore  confidence among buyers and developers. These initiatives augur well for our completed developments at  IOI Palm City and IOI Palm International Parkhouse in Xiamen. Additionally, the expected opening of our  370-room Sheraton Grand Xiamen hotel in Q3 FY2025 is anticipated to drive footfall and business  activities, complementing IOI Mall Xiamen and IOI Business Park Xiamen which will further strengthen  the Group’s recurring income stream.  

Over in Singapore, the property and office markets remain resilient and the improving market sentiment  has notably benefitted IOI Central Boulevard Towers, which saw its committed occupancy improving to  68% and this is within the Group’s expectation. Moving forward, we remain committed to further  increasing occupancy rates for IOI Central Boulevard Towers while we prepare for the development of  W Residences Singapore – Marina View, a branded residence complemented by a luxury 5-star hotel at its  doorstep. 

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