PUTRAJAYA: Since its opening in August 2022, IOI City Mall Phase 2 has successfully capitalised on the resurgence of retail, entertainment and dining activities where footfall has been steadily growing and the secured occupancy rate has reached 84% within seven months of its commencement.
Two new anchor tenants, namely AEON and Golden Screen Cinemas as well as renowned Japanese store chain, Don Don Donki opened for business.
“Our property investment segment continues to outperform, demonstrated by the strong anchor tenants secured and the influx of specialty stores in the pipeline for IOI City Mall 2. This will augur well for Malaysia’s largest shopping mall,” said IOI Properties Group Bhd (IOIPG) chief executive officer Datuk Voon Tin Yow.
The group’s strategy is two-pronged: To launch new products with sustained margins as well as a concerted effort to clear completed inventories by leveraging on its Trusted brand.
“Our wide product offerings from the property development segment, recurring earnings from established property investment portfolios and improving prospects for the tourism sector will provide the group with a strong foundation to assure sustained earnings ahead,” added IOIPG executive vice chairman Lee Yeow Seng.
The property development segment achieved sales with contracts exchanged of RM1.37bil for the nine months of the financial year 2023 (9M FY2023). Local projects contributed RM1.14bil, which is 83% of the total sales while overseas projects from China and Singapore contributed RM226.5mil, or 17% of the total sales.
In Malaysia, the sales secured were largely from the Klang Valley region at RM645.6mil, led by our integrated development at IOI Resort City in Putrajaya with RM164.6mil and our matured township at Bandar Puteri Puchong in Selangor with RM137.5mil of sales.
Johor continues to outperform and contributed sales of RM457.4mil, led by the established township at Bandar Putra Kulai with RM280.5mil and the vibrant township at Taman Kempas Utama with RM75.4mil of sales.
Bandar Putra Kulai has been leading our sales with residential products catered for owner-occupied, ranging from single-storey and double-storey terrace to semi-detached units. The recently launched single-storey semi-detached, Arcela 2 in March 2023 has achieved an admirable take-up rate of 81% within its month of launching.
“The recent increase in OPR has led to a cumulative 125 basis points hike since May 2022 and notwithstanding the softened market, the group will continue to enhance our developments and focus on offering mid-priced range residential units, targeting owner-occupiers who are less sensitive to OPR hike. In terms of placemaking, the long-awaited 16 Sierra Mass Rapid Transit Station is now operational and it is expected to provide added convenience and greater connectivity to the community of 16 Sierra, Puchong,” said Voon.
“In addition to the good take-up rate on our recent launches, the group’s completed inventories have reduced by RM543.9 million over the last nine months. The group remains focused on reducing completed inventories further with upcoming promotional sales campaigns,” he added.
Over in Singapore, property prices continue to rise in contrast with the regional decline and on April 27, 2023, the Singapore government increased the Additional Buyer’s Stamp Duty (ABSD) rate as a cooling measure to moderate the growth.
The measure is targeted to promote a sustainable property market and to prioritise housing for owner-occupiers where the increase in ABSD rate is expected to affect a small percentage of residential property transactions.
Voon said: “There will be some impact on our upcoming Marina Bay project as foreign demand may be dampened but nevertheless, the development which is situated at a strategic location should still be able to command resilient demand from the local Singaporean buyers who have strong spending and purchasing power, underpinned by Singapore’s robust economy.”
Meanwhile, IOIPG recorded a marginal increase of 3% in revenue to RM1.93bil for the nine months of the financial year 2023 (9M FY2023) which ended on March 31 2023 compared to the RM1.87bil revenue recorded a year earlier. Though revenue in the property development segment has declined by 10%, the contraction is offset by the impressive performance observed in the property investment segment which improved by 44% and the hospitality and leisure segment which gained 126% against the preceding year's corresponding period.
The profit before tax (PBT) for 9M FY2023 surged 86% to RM1.32bil from RM708.7mil, whereby the property development segment remains the group’s biggest contributor. The marked improvement in PBT is also attributed to the strong performance generated by the property investment and the hospitality and leisure segments as stated.
An aerial view of IOI Resort City with IOI City Mall, Le Meriden and IOI City Towers.