IGB REIT
Wednesday, July 30, 2025
New Asset On Track By End 2025
Owns 2 of the leading malls in the country i.e. Mid Valley Megamall and The Gardens Mall.
Share price chart from Jan-25 to Jul-25 shows an upward trend, ending near 2.80.
| 1M | 3M | 12M | |
|---|---|---|---|
| Absolute Returns | 10.9 | 20.7 | 30.0 |
| Relative Returns | 10.5 | 16.7 | 28.3 |
Tan Siang Hing
T 603 2268 3000
F 603 2268 3014
E research@publicinvestbank.com.my
IGB Real Estate Investment Trust’s (IGBREIT) 2QFY25 revenue came in at RM160.1m (+6.8% YoY), while net property income (NPI) in the second quarter rose 9.5% YoY to RM119.9m. YTD, total revenue rose 6.1% to RM331.5m and NPI increased by 8.2% to RM253.0m, primarily driven by higher rental income by two of its mall assets. In 2QFY25, the Group reported realised net profit of RM97.8m (+11.0% YoY, +14.4% QoQ) which slightly beat our estimates but within consensus expectations mainly due to lower-than-expected property expenses. YTD, Group realised net profit of RM208.4m (+9.4% YoY) constituted about 52% and 50% of our and consensus full year estimates respectively. Based on the latest valuation reports, the fair value of Mid Valley Megamall (MVM) and The Gardens Mall (TGM) were RM4.0bn and RM1.45bn respectively, unchanged from previous valuations. Separately, IGBREIT is on track to complete the injection of The Mall, Mid Valley Southkey (MVS), Johor for RM2.65bn, which is to be paid by RM1bn cash and the balance of RM1.65bn by way of issuance and allotment of new units in IGBREIT. As told, we adjust FY25 slightly upwards by 4% after margins adjustments while bump FY26/27 upwards by 27%/29% with the proposed asset injection. Maintain Neutral call and RM2.50 TP, based on dividend yield of about 5%.
- 2QFY25 revenue rose 6.8% to RM160.1m while NPI grew by 9.5% to RM119.9m and profit after taxation was up 13.4% YoY to RM92.5m. The higher total revenue, net property income and profit after taxation were mainly due to the higher rental income in the current quarter. The distributable income for the current year quarter amounted to RM104.6m, consisting of a profit of RM97.8m, non-cash adjustments arising mainly from net fair value changes on investment properties of RM5.3m and Manager’s management fee payable in Units of RM6.6m.
- Occupancies virtually full (with both Mid Valley Megamall and The Gardens Mall at 99.9% occupancy). Average gross monthly rental income for Mid Valley Megamall is now at about RM18.72psf (from RM16.28psf in FY23 and RM15.28psf in FY22). In FY25, it has 104 leases due to renewal or about 14% of net lettable area (NLA). Meanwhile, The Gardens Mall which is almost fully occupied at 99.9% is now commanding average rent of RM16.20psf (from RM15.59psf in FY23 and RM13.39psf in FY22). As for lease expiry profile, The Gardens Mall has 92 leases due for renewal which is about 46.5% of its NLA. In December 2024, IGB REIT completed the South Court reconfiguration in Mid Valley Megamall.
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F | CAGR |
|---|---|---|---|---|---|---|
| Revenue | 604.3 | 626.1 | 664.1 | 972.7 | 1,007.7 | 13.6% |
| Pre-tax Profit | 517.6 | 579.8 | 418.7 | 543.5 | 571.1 | 2.5% |
| Reported Net Profit | 617.6 | 579.8 | 418.7 | 543.5 | 571.1 | -1.9% |
| Realised Net Profit | 359.1 | 368.7 | 418.7 | 543.5 | 571.1 | 12.3% |
| Realised EPS (Sen) | 10.0 | 10.2 | 11.5 | 12.4 | 13.0 | 6.8% |
| P/E (x) | 27.5 | 26.9 | 23.7 | 22.1 | 21.1 | |
| DPS (Sen) | 10.5 | 10.7 | 12.1 | 13.3 | 13.8 | |
| Dividend Yield (%) | 3.8 | 3.9 | 4.4 | 4.8 | 5.0 |
Source: Company, PublicInvest Research estimates
| FYE 31 Dec (RM m) | 2Q FY25 | 2Q FY24 | 1Q FY25 | YoY chg | QoQ chg | YTD FY25 | YTD FY24 | YTD chg |
|---|---|---|---|---|---|---|---|---|
| Revenue | 160.1 | 150.0 | 158.3 | 6.8 | 1.1 | 331.5 | 312.5 | 6.1 |
| – Gross rental income | 115.5 | 107.8 | 113.3 | 7.1 | 2.0 | 240.9 | 226.3 | 6.5 |
| – Other income | 44.6 | 42.2 | 45.0 | 5.7 | -1.0 | 90.6 | 86.2 | 5.1 |
| Operating expenses | -40.2 | -40.5 | -50.4 | -0.6 | -20.2 | -78.6 | -78.8 | -0.3 |
| Net Property Income | 119.9 | 109.5 | 107.9 | 9.5 | 11.1 | 253.0 | 233.7 | 8.2 |
| NPI margin (%) | 0.7 | 0.7 | 0.7 | 2.6 | 9.9 | 3.6 | 3.7 | -2.0 |
| Revaluation surplus/others | -5.3 | -6.6 | 233.5 | nm | nm | -9.4 | -9.3 | 0.1 |
| Net Investment Income | 116.7 | 105.0 | 343.5 | 11.1 | -66.0 | 247.8 | 228.8 | 8.3 |
| Int expense | -13.5 | -13.5 | -13.6 | 0.0 | -1.1 | -26.8 | -26.9 | -0.5 |
| REIT’s expenses | -10.7 | -10.0 | -10.9 | 7.0 | -1.7 | -22.0 | -20.7 | 6.1 |
| Pretax | 92.5 | 81.5 | 319.0 | 13.4 | -71.0 | 199.1 | 181.2 | 9.9 |
| Comprehensive Income | 92.5 | 81.5 | 319.0 | 13.4 | -71.0 | 199.1 | 181.2 | 9.9 |
| Realised net profit | 97.8 | 88.2 | 85.5 | 11.0 | 14.4 | 208.4 | 190.5 | 9.4 |
| Distributable Income | 104.6 | 94.7 | 92.5 | 10.5 | 13.1 | 222.7 | 204.0 | 9.1 |
Source: Company, PublicInvest Research estimates
INCOME STATEMENT DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 604.3 | 626.1 | 664.1 | 972.7 | 1,007.7 |
| Total Expenses | -165.0 | -168.6 | -156.4 | -266.0 | -271.5 |
| Pre-tax Profit | 517.6 | 579.8 | 418.7 | 543.5 | 571.1 |
| Income Tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Effective Tax Rate (%) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Minorities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Reported Net Profit | 370.2 | 385.1 | 418.7 | 543.5 | 571.1 |
| Realised Net Profit | 359.1 | 368.7 | 418.7 | 543.5 | 571.1 |
| Growth | |||||
| Revenue | 9% | 4% | 6% | 46% | 4% |
| Pre-tax Profit | 31% | 12% | -28% | 30% | 5% |
| Reported Net Profit | 56% | -6% | -28% | 30% | 5% |
| Realised Net Profit | 7% | 3% | 14% | 30% | 5% |
BALANCE SHEET DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Property, Plant & Equipment | 5,186.0 | 5,438.0 | 5,438.0 | 5,438.0 | 5,438.0 |
| Cash and Cash Equivalents | 274.0 | 258.2 | 244.1 | 2,866.9 | 2,902.5 |
| Receivables, deposits and prepayment | 42.8 | 45.0 | 55.5 | 57.8 | 60.1 |
| Other Assets | 2.1 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Assets | 5,504.9 | 5,741.3 | 5,737.7 | 8,362.6 | 8,400.6 |
| Payables | 253.7 | 271.1 | 275.5 | 275.5 | 275.5 |
| Borrowings | 1,214.6 | 1,214.8 | 1,205.3 | 2,201.6 | 2,198.0 |
| Deferred tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other Liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Liabilities | 1,468.4 | 1,485.8 | 1,480.7 | 2,477.1 | 2,473.5 |
| Shareholders’ Equity | 4,036.6 | 4,255.4 | 4,256.9 | 5,885.5 | 5,927.1 |
| Total Equity and Liabilities | 5,504.9 | 5,741.3 | 5,737.7 | 8,362.6 | 8,400.6 |
PER SHARE DATA & RATIOS
| FYE Dec | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Book Value Per Share | 1.1 | 1.1 | 1.1 | 1.3 | 1.3 |
| NTA Per Share | 1.1 | 1.1 | 1.1 | 1.3 | 1.3 |
| Distributable EPS (Sen) | 11.4 | 11.8 | 12.8 | 14.0 | 14.6 |
| DPS (Sen) | 10.5 | 10.7 | 12.1 | 13.3 | 13.8 |
| Payout Ratio (%) | 91.6 | 90.5 | 94.8 | 95.0 | 94.7 |
| ROA (%) | 11.2 | 10.1 | 7.3 | 6.5 | 6.8 |
| ROE (%) | 15.3 | 13.6 | 9.8 | 9.2 | 9.6 |
Source: Company (actual), PublicInvest Research estimates (forecast)
STOCKS
OUTPERFORM: The stock return is expected to exceed a relevant benchmark’s total of 10% or higher over the next 12months.
NEUTRAL: The stock return is expected to be within +/- 10% of a relevant benchmark’s return over the next 12 months.
UNDERPERFORM: The stock return is expected to be below a relevant benchmark’s return by -10% over the next 12 months.
TRADING BUY: The stock return is expected to exceed a relevant benchmark’s return by 5% or higher over the next 3 months but the underlying fundamentals are not strong enough to warrant an Outperform call.
TRADING SELL: The stock return is expected to be below a relevant benchmark’s return by -5% or more over the next 3 months.
NOT RATED: The stock is not within regular research coverage.
SECTOR
OVERWEIGHT: The sector is expected to outperform a relevant benchmark over the next 12 months.
NEUTRAL: The sector is expected to perform in line with a relevant benchmark over the next 12 months.
UNDERWEIGHT: The sector is expected to underperform a relevant benchmark over the next 12 months.
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T 603 2268 3000
F 603 2268 3014
