Sime Darby Property Comfortable Raising More Debt to Accelerate Industrial and Data Centre Expansion

Sime Darby Property Bhd says it is in a strong financial position to take on additional debt as it ramps up investment in income-generating industrial and hyperscale data centre projects, which form the backbone of its long-term recurring income strategy.

Group managing director and chief executive officer Datuk Seri Azmir Merican said the company’s gearing level of 34% provides ample room for expansion without compromising financial stability.

“At 34%, we're very comfortable, and we expect our borrowings to increase moderately as we grow our recurring income portfolio,” he said during the group’s virtual 3QFY2025 results briefing.

Azmir emphasised that the group does not borrow for daily operational expenses. “All borrowings are tied to expansion and income-generating assets,” he added.

Sukuk Market to Fund Future Growth

Sime Darby Property is preparing for another sukuk drawdown in FY2026, following its RM800 million issuance in April 2025, which raised its total outstanding Islamic Medium-Term Notes to RM2.2 billion.

“We have room for expansion, and at the right time—when we need the funding and the timing is right—we will tap the sukuk market,” Azmir said.

Future sukuk issuances will be structured to match the construction and funding timeline of its industrial and data centre assets, ensuring capital efficiency and steady returns.

Debt Up by RM1.1 Billion to Support Industrial & Data Centre Projects

Sime Darby Property’s total debt increased by over RM1.1 billion to RM4.36 billion this year, driven largely by:

• Acquisition of two industrial assets

• Early-stage development of its flagship hyperscale data centre in Elmina Business Park

• Ongoing construction of industrial and logistics facilities

Azmir described the Elmina data centre development as a “multi-decade recurring income engine”, supported by a 20-year lease valued at RM7.6 billion. The group will collect lease payments rather than operate the facility, reinforcing predictable long-term earnings.

Strategic Investments Across Major Industrial Corridors

During the nine-month period (9MFY2025), Sime Darby Property made several strategic moves to enlarge its industrial footprint:

• Acquired the remaining 50% stake in BBR Industrial Gateway for RM120.5 million

• Expanded joint ventures across Klang Valley growth zones

• Entered Carey Island and Kuala Selangor through 50:50 partnerships with SD Guthrie Bhd, covering up to 3,000 acres

These expansions align with rising demand for:

• Industrial land in Selangor

• Industrial property in the Subang area

• Factory space in Puchong

• Large-scale industrial hubs supporting logistics, automation and data infrastructure

The group’s positioning places it at the forefront of Malaysia’s industrial transformation, especially given the strong pipeline in Greater Kuala Lumpur’s industrial corridors.

Record Sales and Strong Financial Performance

For 9MFY2025, Sime Darby Property posted:

• Net profit: RM430.18 million

• Revenue: RM3.15 billion

• Unbilled sales: Record RM4.1 billion

• Sales achieved: RM3.4 billion

• Bookings: RM1.5 billion as of mid-November

These indicators underscore robust demand across its residential, commercial and industrial developments, and further support its shift toward a recurring-income-driven business model.

Relevance to Klang Valley Real Estate Trends

Sime Darby Property’s growing industrial and data centre presence reflects broader market momentum across Greater KL, including:

• Rising interest in commercial property in KL

• Growth in office space in Bukit Jalil

• Strong uptake of industrial land in Selangor

• Increasing demand for factory facilities in Puchong

• Expansion of industrial hubs in the Subang area

These synergies position the group to benefit from Malaysia’s expanding digital, logistics and advanced manufacturing ecosystems.