RAM Ratings assigns first-time ratings of AA3/Stable/P1 to Avaland, a unit of Ayala Land

Published on 24 Apr 2024.

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RAM Ratings has assigned AA3/Stable/P1 corporate credit ratings to Avaland Berhad (Avaland or the Group, formerly known as MCT Berhad). A mid-sized property player in Malaysia, Avaland’s transformation into a pure play property developer follows an internal restructuring and rebranding after its acquisition by Ayala Land Inc. (Ayala Land) in 2018. The largest and one of the most established property developers in the Philippines, Ayala Land owned 66.2% of the Group as at end-December 2023. Ayala Land is in turn 51.0% owned by Ayala Corporation, one of Philippines’s largest conglomerates. 

The ratings consider the Group’s business and operational alignment to its parent and improving presence in the domestic property development business. The AA3/Stable/P1 ratings incorporate an uplift arising from Avaland’s close relationship with its parent, Ayala Land, given the entities’ strong operational ties and the solid track record of operational and financial support from Ayala Land since the acquisition. Avaland is one of Ayala Land’s strategic investments and an integral part of its forward plans. This is evinced by the strong board and management representation and past financial support from the parent; as at end-December 2023, shareholder advances stood at RM252.0 mil.

With new management in place at Avaland since 2019, the efforts to revamp its business model and improve processes and systems have translated to successful property launches with healthy take-up rates and a strong pipeline of planned projects despite a short track record. Avaland’s healthy profit margins compare well to its industry’s peers. We anticipate the Group’s growth plans to strengthen its market position and improve its financial performance in the near term. Funds from operations debt coverage is expected to remain adequate at about 0.15 times in the next two years, in line with rising profitability. Its healthy unbilled sales of RM863.3 mil as end-December 2023 (end-December 2022: RM720 mil) also provide good revenue and earnings visibility for the foreseeable future.

Expected higher leverage from aggressive planned expansion moderates the ratings. Projected to peak at about 0.90 times this year owing to increased borrowings, the Group’s gearing will stay at around 0.80 times in the next two years. The Group is also inevitably exposed to the inherent cyclical nature of the property sector and the competitive operating landscape within the housing market, which continues to experience an overhang, although there have been recent signs of improvement. 


Analytical contacts
Wong Ee Loo
(603) 3385 2521

Thong Mun Wai
(603) 3385 2522

Media contact
Sakinah Arifin
(603) 3385 2500


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
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