Sime Darby Property Bhd, as part of its transformation journey, may pool some of its assets and launch a real estate investment trust (REIT) in the future, according to group managing director Datuk Azmir Merican.
Azmir said that the company's current focus is on establishing an industrial development fund (IDF) as part of its investment and asset management business under the SHIFT 25 business model.
"That will be the first thing that we focus on. What needs to happen is that we need to operationalise and translate this with projects. We want to ensure we have a credible and good performing first fund," he said today, during a virtual media briefing.
While a REIT is a good platform for earning money as an asset manager because it provides long-term recurring income, Azmir said that it is still too early to comment on it.
Sime Darby Property, Malaysia's largest listed property developer by landbank size, currently owns nine investment properties worth RM1.7 billion, with an average occupancy rate of 75 per cent to 80 per cent.
It has five office buildings, two retail malls (Melawati Mall and KL East Mall), and a 25 per cent stake in Sime Darby Business Centre, a commercial asset in Singapore.
Retail malls, a relatively new addition to the company's portfolio, are notable assets. The malls were built within its developments to supplement and act as a catalyst for demand for the surrounding residential products.
In the industrial segment, Sime Darby Property has formed a joint venture with Japan's Mitsui & Co. Ltd. and Mitsubishi Estate Co. Ltd. to develop and lease industrial facilities in Bandar Bukit Raja, Klang.
The project, which has a gross development value of RM530 million, consists of built-to-suit industrial facilities for warehousing and logistics.
Sime Darby Property's wholly-owned subsidiary Sime Darby Property (Capital Holdings) Pte Ltd also announced last year that it had formed an IDF collaboration with LOGOS Property Group Ltd's wholly-owned subsidiary LOGOS SE Asia Pte Ltd.
The goal is to raise about US$200 million (RM850 million) in seed capital from accredited and institutional investors in order to develop and invest in "build-to-suit and lease or sell" industrial assets in Klang.
Meanwhile, Azmir said that Sime Darby Property is optimistic about its outlook for the fiscal year 2022 (FY22), and has set a sales target of RM2.6 billion for the year, which will be supported by development projects with a total GDV of RM2.8 billion.
The company intends to launch properties worth a total of RM788.1 million in the first quarter of 2022, the majority of which will be residential units.
Azmir believes that as the economy recovers after all movement control orders are lifted in the fourth quarter of 2021, people will be more confident in purchasing more properties.
He hoped that another Home Ownership Campaign (HOC) would be launched to increase purchasing interest.
The HOC, which benefited many property developers and homebuyers, came to an end on December 31, 2021.