KUALA LUMPUR: Sime Darby Property Bhd has received the AA+IS rating with a stable outlook for its Sukuk Musharakah from MARC Ratings Bhd for the third consecutive year.
The outstanding under the rated programme stood at RM1.4 billion as of Nov 30 this year.
According to MARC, SD Property's strong sales track record in well-established townships and strong balance sheet characterised by low leverage, were the key rating drivers.
"Other contributing factors include the overall take-up rate for launched projects in the first nine months of financial year 2023 (9MFY23) with a combined gross development value (GDV) of RM3.2 billion and a 75 per cent take-up rate as of Nov 5, 2023, which are primarily within the group's existing maturing townships with well-established connectivity.
"With unbilled sales of RM3.7 billion as at end-September 2023, the group has strong earnings visibility through 2026.
"Relative to the size of its projects, SD Property's completed inventory remained modest at RM433.1 million as of end 9MFY23," it said in a statement.
MARC also highlighted SD 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 said the company 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 its 9MFY23 industrial launches with a combined GDV of RM675.6 million which achieved an average take-up rate of 86 per cent as of Nov 5.
With developable landbank standing at about 13,640 acres, MARC said SD Property has a strong potential to undertake further township and industrial developments.
Commenting on the rating, SD Property group managing director Datuk Azmir Merican said it reflects the company's strong fundamentals and continued growth prospects.
"We are committed to maintaining robust financial channels, and the Sukuk Musharakah programme exemplifies how we are transforming from a pure-play property developer to a real estate company in tandem with our 2030 Sustainability Goals," he added.
In August, SD Property announced the completion of its second issuance under the Sukuk Musharakah 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.
Notably, RM200 million of the issuance was designated as sustainability sukuk, aligned with the Sustainable and Responsible Investment sukuk framework issued by the Securities Commission and Asean Sustainability Bond Standards issued by the Asean Capital Markets Forum.
The group is primed to utilise the sukuk proceeds to support its future investments, while refining its capital structure and optimising debt management.