IGB REIT Maintains Stability Ahead of Southkey Mall Boost, Upside Seen Limited

IGB Real Estate Investment Trust (IGB REIT) maintained stable mall operations and steady operating costs in 3QFY25, with limited upside following its recent share price rally. The trust posted a 9.8% year-on-year rise in distributional income to RM311 million for the first nine months of FY25, supported by a 6.2% increase in gross revenue and a marginal 0.9% drop in property operating expenses.

IGB REIT

Net property income climbed 8.6% to RM377.9 million. Occupancy rates remained strong at 99.8% for Mid Valley Megamall and 98.6% for The Gardens Mall, despite temporary dips due to renovations. Analysts maintained a HOLD call with an unchanged target price of RM2.81, noting that the market has largely priced in the benefits from the Mid Valley Southkey Mall acquisition. The new asset is expected to contribute one month of rental income in 4QFY25 and full-quarter income from FY26 onwards. Gearing remains healthy at 23%, projected to rise to 28.4% post-acquisition.

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