KUALA LUMPUR (Aug 24): Sime Darby Property Bhd (KL:SIMEPROP) announced on Monday that its rapidly expanding investment and asset-management business is providing greater earnings visibility and a growing stream of recurring income, supporting a higher dividend payout policy.
The push to build recurring income is central to Sime Darby Property's transformation from a pure-play property developer into a diversified real estate group, said group managing director and chief executive officer Datuk Seri Azmir Merican.
"A couple of years ago, our results were lumpy. It is difficult to sustain incremental growth over a long period of time because property development is influenced by cycles, launches and market factors that we cannot overcome ourselves," Azmir said during a virtual media briefing at the group's 2QFY2026 results announcement.
"By having recurring income, we are able to mitigate these issues. As recurring income grows bigger, it also allows a bigger portion of earnings to be predictable. Therefore, it enhances our ability to provide better returns to shareholders."
The group raised its dividend payout policy to between 40% and 60% of net profit, excluding extraordinary items — up from its previous baseline of 20%.
The higher payout comes as its assets under management (AUM) reached about RM5 billion as at July 2026, following its continued expansion into industrial, logistics and investment assets. Among key milestones were the completion of Metrohub 4 and the groundbreaking of Metrohub 3 at SDPLOG's E-Metro Logistics Park in Bandar Bukit Raja. Its funds under management, meanwhile, hit RM2.25 billion after the first close of its RM1.25 billion New Economy Venture Fund.
For the first half ended June 30, 2026 (1HFY2026), revenue from the group's investment and asset management segment jumped 59% to RM137.8 million from RM86.7 million for 1HFY2025, bolstered by the commencement of lease income from its built-to-lease data centre that was completed in March, stronger contributions from KLGCC Mall, rental uplifts and a full six- month contribution from an expanded logistics portfolio.
Azmir said the group wants the investment and asset management segment to eventually contribute about 30% of group earnings before interest and tax (Ebit) by FY2028. That, however, does not mean Sime Darby Property intends to slow its property-development operations, he said.
"The good news is that we have a healthy problem where the property development division is also undergoing growth. When they both grow together, I think it is a terrific [good] problem to have," he said.
More residential launches in second half
As for the second half of the year, Sime Darby Property plans to tilt its launch pipeline towards residential landed and high-rise developments, while maintaining industrial assets as a core growth driver.
Chief marketing and sales officer Datuk Lai Shu Wei said industrial products dominated in terms of contribution in 1HFY2026, but expects the product mix over the full year to become more balanced as more residential projects are rolled out.
"The industrial segment will continue to become one of our main drivers. But we will also be looking at a greater proportion of residential landed and high-rise launches in the second half," Lai said.
Sime Darby Property launched RM2 billion worth of projects in 1HFY2026, of which industrial developments accounted for RM816.7 million or 40%, followed by residential high-rise at RM561.9 million, residential landed at RM534.8 million and commercial projects at RM134.8 million.
Sales for the period reached RM1.8 billion, led by industrial properties at RM861 million (49%), followed by residential (25%), high-rise (18%) and commercial properties (7%).
The group is keeping to its RM4 billion sales target for FY2026 and RM4.7 billion worth of launches.
As at Aug 9, it had RM1 billion in bookings awaiting conversion, while unbilled sales stood at RM3.8 billion, providing earnings and cash-flow visibility for more than three years.
On take-up rates, Azmir said reported rates can vary substantially, depending on how recently a project was launched. High-rise projects typically see inventory absorption over a three-year period, he noted.
"We are not worried about the take-up rates. We think Malaysia's property sector in general is still resilient," he said.
Sime Darby Property shares closed unchanged at RM1.32 on Monday, giving the group a market capitalisation of RM8.98 billion.