RAM Ratings reaffirms Great Realty’s AAA(fg)/Stable rating

Published on 17 Mar 2020.

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RAM Ratings has reaffirmed the AAA(fg)/stable rating of Great Realty Sdn Bhd’s (the Company) RM170 mil Guaranteed MTN Programme. The enhanced rating reflects the irrevocable and unconditional financial guarantee extended by Danajamin Nasional Berhad, rated AAA/Stable/P1 by RAM.

Excluding the Danajamin guarantee, Great Realty’s stand-alone credit profile reflects the commendable market position of its sole operating asset, Aman Central – a mid-range shopping mall in Alor Setar. The Company’s moderate financial profile is expected to remain stable as its earlier plans to raise more borrowings have been shelved given the uncertainties. 

Aman Central’s competitive positioning is anchored on its strategic location within the central business district of Alor Setar - although moderated by the Mall’s relatively short operating track record of slightly more than four years. The lack of direct competition in the vicinity, diverse tenant mix as well as a three-day combined weekend in Kedah and neighbouring Perlis allows the Mall to average a commendable one million visitors per month. 

As at end-December 2019, Aman Central’s average occupancy rate (AOR) improved to 92% (end-December 2018: 86%) while its average rental rate remained stable at RM5.46 psf (FY Dec 2018: RM5.50 psf). We expect the Mall’s AOR to increase to 98% by end-2020, as negotiations with prospective new tenants are finalised. The Mall’s lease-maturity profile is deemed lumpy as close to 69% of its net lettable area (NLA) will be due for renewal in 2021, i.e. its second rental-renewal cycle. Despite this, the management expects to retain most of its tenants.

In the next two years, the Mall will undergo several asset-enhancement initiatives, which will provide further upside potential to Great Realty’s rental income given the enlarged NLA when the exercises are completed.  In the medium term, Aman Central is anticipated to maintain its market position and consistent footfall. However, competition could rise with the completion/extension of new malls in Penang.  In the short term, the outbreak of COVID-19 could also dampen traffic.

Great Realty’s balance sheet has been strengthened mainly by the revaluation of Aman Central (market value climbed to RM750 mil from RM354 mil in 2018). As at end-December 2019, the Company’s gearing ratio had improved substantially to 0.37 times, from 1.73 times a year earlier. Its funds from operations debt cover (FFODC) ratio declined marginally to 0.15 times (FY 2018: 0.16 times). 

Incorporated in 2009, Great Realty had been set up by Belleview Sdn Bhd (the Group) - a Penang-based developer with almost 30 years’ experience in property development, management and investment. The Group is wholly owned by Dato’ Sonny Ho Kiong Chan and his wife.  


Analytical contact
Lim Chern Yit
(603) 3385 2528

Media contact
Padthma Subbiah
(603) 3385 2577


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2020 by RAM Rating Services Berhad

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