Sime Darby Property group managing director Datuk Seri Azmir Merican
PETALING JAYA: Sime Darby Property Bhd
(SimeProp) has retained its AA+IS rating with a stable outlook for its RM4.5bil Islamic medium-term notes programme (Sukuk Musharakah) for the fourth consecutive year, reflecting the group’s robust financial health and strong sales performance.
As of Nov 30, 2024, RM1.4bil remained outstanding under the investment-grade programme.
In a statement, the property developer said the rating, reaffirmed by MARC Ratings Bhd, reflects its effective debt management, consistent growth and strategic diversification into industrial and logistics-property development.
Group managing director Datuk Seri Azmir Merican said the reaffirmation underscores the company’s commitment to financial stability, which enables it to advance growth plans responsibly.
“This stability, indicating a strategic balance between managing debt effectively and leveraging it for future growth opportunities, enables us to responsibly advance our growth plans and diversify our income streams.
“As we continue to evolve as a sustainable real estate player, the Sukuk Musharakah Programme remains a key enabler of our strategic growth initiatives,” Azmir said in a statement.
For the first nine months of its financial year 2024 (9M24), SimeProp launched RM2.8bil worth of projects with a take-up rate of 76%.
Unbilled sales stood at RM3.7bil, giving earnings visibility over the next three years.
Completed unsold inventory remained modest at RM185.5mil as of September 2024, reflecting efficient project management.
“The rating agency highlighted the group’s ongoing diversification into industrial and logistics property development, including built-to-lease projects aimed at generating recurring income,” the property developer said in its statement.
It said SimeProp’s developable land bank of approximately 12,900 acres (excluding non-core land), continues to provide development opportunities for industrial and township projects.
MARC Ratings also noted progress on the Battersea Power Station project in London, where Sime Darby Property holds a 40% stake, with the residential component of Phase 3B achieving a 61% sales rate and the commercial building, 50 Electric Boulevard, reaching 45% occupancy as of September 2024, with lease negotiations ongoing.
For 9M24, SimeProp’s revenue grew by 35% year-on-year to RM3.3bil, driven by higher sales and progress across projects primarily in its Klang Valley township developments.
Pre-tax profit for the period stood at RM636.8mil, supported by higher revenue and sales of non-core land, offsetting provisions for rental guarantees related to Battersea Power Station’s 50 Electric Boulevard Grade A office building.
“Gearing level remained low, with borrowings reduced slightly to RM2.8bil compared with the previous year (end-2023: RM2.9bil), and a gross debt-to-equity ratio of 0.27 times. Cash balances of RM790.7mil reflect a healthy liquidity position,” the statement added.
