Company Coverage
IGB REIT (IGBREIT MK) - 3Q26: In Line; Southkey Remains The Growth Engine
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
RM2.72
RM2.92
+7.4%
RM3.16
Analyst
Highlights
- 3Q26 results were in line with expectations, with a DPU of 3.51 sen declared.
- Management maintained its mid-single-digit reversion guidance for 2027, and we believe this is conservative as MVS is seeing reversion well above 5%. Historically, IGB REIT has mostly exceeded its reversion guidance.
- Maintain BUY with a lower target price of RM2.92 as we increase our cost of equity assumption and rollover our valuation base to 2027. IGB REIT currently offers 5.4-5.6% yields for 2026-27.
Analysis
- Results in line. IGB REIT reported 3Q26 revenue of RM249m (+3.5% qoq; +50.9% yoy) and core net profit of RM147m (+2% qoq; +43% yoy). This brings 9M26 core net profit to RM459m (+47.6% yoy), within our expectation and accounting for 74%/75% of our/consensus full-year estimates.
- Declared 3.51 sen dividend for 3Q26, with a payout ratio of 97.4%. 9M26 DPU of 10.95 sen represents an annualised distribution yield of 5.5%.
Highlights
- 3Q26 results were in line with expectations, with a DPU of 3.51 sen declared.
- Management maintained its mid-single-digit reversion guidance for 2027, and we believe this is conservative as MVS is seeing reversion well above 5%. Historically, IGB REIT has mostly exceeded its reversion guidance.
- Maintain BUY with a lower target price of RM2.92 as we increase our cost of equity assumption and rollover our valuation base to 2027. IGB REIT currently offers 5.4-5.6% yields for 2026-27.
Analysis
- Results in line. IGB REIT reported 3Q26 revenue of RM249m (+3.5% qoq; +50.9% yoy) and core net profit of RM147m (+2% qoq; +43% yoy). This brings 9M26 core net profit to RM459m (+47.6% yoy), within our expectation and accounting for 74%/75% of our/consensus full-year estimates.
- Declared 3.51 sen dividend for 3Q26, with a payout ratio of 97.4%. 9M26 DPU of 10.95 sen represents an annualised distribution yield of 5.5%.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
RM2.72
RM2.92
+7.4%
RM3.16
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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