Sime Darby Property Berhad has been accorded the AA+IS rating with a stable outlook for its Sukuk Musharakah Programme by MARC Ratings Berhad, making it the third consecutive year the group has maintained the rating.
The outstanding under the rated programme stood at RM1.4 billion as of 30 November 2023. MARC Ratings noted Sime Darby Property’s strong sales track record in well-established townships, and strong balance sheet, characterised by low leverage as the key rating drivers.
Other contributing factors include the overall take-up rate for launched projects in 9M FY2023 with a combined gross development value (“GDV”) of RM3.2 billion and a 75% take-up rate as of 5 November 2023, which the agency stated are primarily within the Group’s existing maturing townships with well-established connectivity. It further stated that with unbilled sales of RM3.7 billion as at end-September 2023, the Group has strong earnings visibility through 2026.
The ratings agency also stated that relative to the size of its projects, Sime Darby Property’s completed inventory remained modest at RM433.1 million as of end-9M FY2023. MARC Ratings also noted Sime Darby Property’s strategy to transform from a pure-play property developer into a sustainable real estate player with broader presence in property development, investment and asset management. It stated that the Group is focused on growing its industrial and logistics segment as part of product diversification including build-to-lease properties to strengthen its recurring income stream. This is reflected by the Group’s 9M FY2023 industrial launches with a combined GDV of RM675.6 million which achieved an average take-up rate of 86% as of 5 November 2023.
With developable landbank standing at about approximately 13,640 acres, MARC Ratings sees that the Group has a strong potential to undertake further township and industrial developments.
Sime Darby Property’s Group Managing Director, Dato’ Azmir Merican said that the rating reflects the Group’s strong fundamentals and continued growth prospects.
Earlier in August, the Group announced the successful completion of its second Sukuk issuance under the Sukuk Musharakah Programme with a nominal value of RM600 million. The issuance attracted a diverse group of fixed-income and high-calibre investors, reaching an oversubscription of more than eight times and accumulating an order book valued at over RM4.8
billion.
