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RAM Ratings affirms AAA/Stable rating of sukuk issued by KLCC REIT funding conduit Midciti Sukuk
Published on 06 Aug 2025.
RAM Ratings has affirmed the AAA/Stable rating of Midciti Sukuk Berhad’s (Midciti) RM3.0 bil Sukuk Murabahah Programme (2014/2044).
The affirmation is based on the superior assets and lease profile, conservative balance sheet and robust debt coverage metrics of KLCC Real Estate Investment Trust (KLCC REIT or the REIT). Incorporated as the funding conduit of KLCC REIT with no operations of its own, Midciti depends on inter-company transactions with the REIT to meet its obligations under the Sukuk Programme.
The rating also considers KLCC REIT’s very strong relationship with its ultimate parent, Petroliam Nasional Berhad (PETRONAS), the national oil company. The REIT’s assets are deemed to be highly strategic to PETRONAS given the latter’s 66.94% effective stake in KLCCP Stapled Group (the Stapled Group), which the REIT is a part of - and PETRONAS’s role as the single master lessee of the bulk of these assets. For these reasons, the REIT in our view is highly likely to receive extraordinary support from PETRONAS in the remote event of financial distress.
Together with KLCC Property Holdings (KLCCP), KLCC REIT forms the largest REIT in Malaysia by property value (RM16.2 bil) and market capitalisation (RM14.7 bil). We view the quality of assets in the REIT’s portfolio - PETRONAS Twin Towers, Menara ExxonMobil and Menara 3 PETRONAS - to be exceptional, underpinned by their strategic location and long-tenured triple-net leases with PETRONAS which provide the REIT with earnings certainty and a robust net property income margin of 94%. A 9% contractual rent step-up which will take effect at Menara ExxonMobil in April 2026, will further improve the REIT’s earnings.
KLCC REIT continues to maintain very low leverage and debt to operating profit before depreciation, interest, and taxes (OPBDIT) ratios of 0.14 times and 2.72 times, respectively, as at end-December 2024. While revenue dipped a marginal 0.54% following the departure of a major tenant from Menara 3 PETRONAS’s retail podium, fixed charge coverage stayed robust at 8.35 times in FY Dec 2024 (FY Dec 2023: 8.51 times). We understand that a replacement tenant has been secured and due to commence leasing by 3Q 2025.
Analytical contacts
Nur Hadhirah Binti Bahrom
(603) 2708 8207
hadhirah@ram.com.my
Tan Yan Choong
(603) 2708 8256
yanchoong@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
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.
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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