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RAM Ratings affirms AAA rating of Suria KLCC’s MTN Programme
Published on 28 Nov 2024.
RAM Ratings has affirmed the AAA/Stable rating of Suria KLCC Sdn Bhd’s (Suria KLCC or the Company) RM600 mil Islamic Medium-term Notes (MTN) Programme (2014/2044).
Suria KLCC is the owner and property manager of the iconic Suria KLCC Mall (the Mall), located within the Kuala Lumpur City Centre (KLCC) development. The rating affirmation reflects the Company’s conservative financial profile and Suria KLCC Mall’s resilient performance, thanks partly to the management’s proactive tenant reconfiguration initiatives amid the competitive retail landscape.
For 7M FY Dec 2024, the Mall’s average rental and occupancy rates improved to RM37 psf and 98.9% while Suria KLCC’s operating profit before depreciation, interest and tax margin rose to a commendable 85.0% (FY Dec 2023: RM35 psf, 98.0% and 82.9%). Supported by campaigns to boost retail activities and the return of international tourists, the Mall’s 2024 annualised footfall reached 48.2 million.
As at end-July 2024, about 74% of leases (by area) expiring in 2024 were renewed, with the rest under negotiation. The Mall signed up 15 new tenants in the last twelve months, contributing to the weighted average lease expiry of 4.88 years. Leases renewed as at end-July 2024 commanded a positive rental reversion of 6% with step-up provisions. These coupled with a well distributed lease maturity profile are expected to sustain the performance of the Mall.
Suria KLCC is a wholly owned subsidiary of KLCC Property Holdings Berhad (KLCCP). The Company’s linkage with its immediate parent KLCCP and in turn its indirect shareholders – KLCC (Holdings) Sdn Bhd (KLCCH) and Petroliam Nasional Berhad (PETRONAS) – is deemed “close” (as defined in RAM’s Criteria on Group Rating Links), given that the Mall is a core component of the KLCC development, a prime real estate investment of KLCCH. The development is also closely associated with PETRONAS – the major lessee of the prominent PETRONAS Twin Towers.
Analytical contacts
Jason Neo
(603) 3385 2582
jasonneo@ram.com.my
Liew Kar Ling
(603) 3385 2586
karling@ram.com.my
Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my
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.
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Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
© Copyright 2024 by RAM Rating Services Berhad
