IGB REIT to Acquire Mid Valley Southkey Mall for RM2.65 Billion in First Johor Expansion

"IGB REIT will acquire Johor's Mid Valley Southkey Mall for RM2.65 billion, its first venture outside KL. The deal will boost the REIT’s property portfolio past RM8 billion and deliver a 7.2% yield."

Kuala Lumpur, 25th June 2025, 01.03pm - IGB Real Estate Investment Trust has announced plans to acquire Mid Valley Southkey Mall in Johor Bahru for RM2.65 billion, marking its first venture outside the Klang Valley and a major strategic expansion into the southern region.

The proposed acquisition, unveiled in a filing with Bursa Malaysia on Tuesday, involves a cash-and-units deal with Southkey Megamall Sdn Bhd (SMSB)—a 70%-owned subsidiary of IGB Bhd, which also holds a 53.9% stake in IGB REIT.

Deal Structure & Valuatio

The transaction will be funded through a combination of RM1 billion in cash and RM1.65 billion in new IGB REIT units, issued to SMSB at RM2.36 per unit. The RM2.65 billion price tag matches the independent market valuation provided by Henry Butcher Malaysia Sdn Bhd.

As of March 31, 2025, IGB REIT reported RM248.87 million in cash reserves and RM1.2 billion in borrowings, indicating that additional funding or debt restructuring may be considered.

The deal is subject to regulatory and unitholder approvals and is expected to be completed by Q4 2025.

About Mid Valley Southkey Mall

Located near the Johor–Singapore Causeway, Mid Valley Southkey Mall (MVS Mall) is part of a large integrated township and mirrors the successful Mid Valley Megamall in Kuala Lumpur.

Key facts:

• Net lettable area: Over 1.5 million sq ft
• Occupancy rate (as of May 2025): 94.98%
• Anchor tenants: SOGO, Village Grocer, Golden Screen Cinemas, Aurum Theatre, and MVEC Exhibition Hall
• Car parks: 5,617 bays
• FY2024 revenue: RM268.68 million
• Net book value (as of end-2024): RM1.1 billion
• Targeted NPI yield: 7.2%

Strategic Portfolio Growth

The acquisition will increase IGB REIT’s total investment property value to over RM8 billion, strengthening its position as a leading retail-focused REIT in Malaysia.

“Mid Valley Southkey is a natural extension of our existing Mid Valley Megamall and The Gardens Mall ecosystem. Its strategic location, strong occupancy, and brand recognition make it a high-quality addition that will generate recurring income and long-term value,” the group said.

IGB REIT currently owns two major retail assets in Kuala Lumpur and has long been recognised for its stable income streams and strong tenancy base.

Market Reaction

Shares of IGB REIT ended two sen lower at RM2.28 on Tuesday, valuing the trust at RM8.26 billion. The REIT has generally been viewed as a defensive play in Malaysia’s real estate market due to its consistent dividend track record and premium mall locations.