• MARC noted Sime Darby Property recorded an average take-up rate of 92% as at Nov 6, 2022 for recent launches. 
  • It said the high take-up was attributable to the developer’s long and successful track record as a township developer as well as the good location of its projects that have strong connectivity. 

KUALA LUMPUR (Dec 29): MARC Ratings has affirmed its rating of AA+ with a stable outlook for Sime Darby Property Bhd’s (SD Property) RM4.5 billion Islamic medium-term notes (IMTN) programme (Sukuk Musharakah). The outstanding under the rated programme stood at RM800 million as of Nov 30, 2022.

“SD Property’s continued strong sales track record in its well-established townships and healthy balance sheet characterised by low leverage position remain key rating drivers,” said the rating agency.

The rating benefits from a one-notch uplift for implicit support from parent Permodalan Nasional Bhd (PNB), said MARC in a statement on Thursday (Dec 29).

MARC noted SD Property recorded an average take-up rate of 92% as at Nov 6, 2022 for recent launches. 

It said the high take-up was attributable to the developer’s long and successful track record as a township developer as well as the good location of its projects that have strong connectivity. 

“Unbilled sales of RM3.5 billion provide earnings visibility through 2024. In terms of inventory management, the group has continued to clear its completed inventories, which reduced to a modest gross development value of RM389.7 million as at end-September 2022,” it added.

For its industrial/logistics developments, mainly in Bandar Bukit Raja and the Elmina Business Park, SD Property recorded an average take-up rate of 88% as at Nov 6, 2022 for recent launches. 

“Aiming to capitalise on the demand for space for distribution centres and cold-chain logistics, these developments are expected to boost recurring income streams,” said MARC.

It said the group’s revenue stood at RM1.8 billion and pre-tax profit was RM323.1 million in the first nine months of 2022. 

“Total borrowings of RM3.5 billion is expected to increase to partially fund its call option exercise on land for industrial developments of about RM808 million,” said MARC, adding gross debt-to-equity ratio is projected to increase to about 0.46 times from 0.37 times as at end-September 2022.

SD Property’s unrestricted cash balances of RM546.1 million and unutilised credit lines of RM3.7 billion under the IMTN programme provide support to operational and strategic activities, it added.

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