KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has affirmed its AA+IS rating with a “stable” outlook on Sime Darby Property Bhd’s Islamic medium-term notes programme of RM4.5bil under the syariah principle of Musharakah.

       In a statement, MARC said Sime Darby Property’s well-established position as a township developer and its strong sales track record in domestic property development remain key rating drivers.

       “Its sizeable land bank of 15,199 acres in key population growth areas in the Klang Valley that offers prospects for development and its low leverage position underpin the group’s credit profile.

       “The rating incorporates a one-notch uplift for implicit support from parent Permodalan Nasional Bhd,” it said.

       MARC noted that in the first half of 2021, Sime Darby Property launched 20 domestic projects with a combined gross development value (GDV) of RM1.6bil, bringing the total GDV of ongoing projects to RM7.5bil.

       Of this, the Klang Valley accounted for a sizeable 86%, underscoring the strong average take-up rate of 88%.

       In addition to location, the good response is due to its property mix with a focus on landed residential units priced in the mid-market segment with strong highway connectivity.

       Unbilled sales of RM1.8bil as at end-June 2021 provides healthy earnings visibility. In terms of inventory level, this was lower at RM554.1mil.

       For the first half of 2021, Sime Darby Property recorded year-on-year improvement in revenue and operating profit to RM1.1bil and RM159.5mil, respectively.

       Its borrowings increased slightly to RM3.4bil as at end-June 2021, with a low gross and net debt-to-equity ratios of 0.37 time and 0.29 time, respectively. This includes the outstanding sukuk of RM800mil.

       “Sime Darby Property has retained strong financial flexibility stemming from significant unutilised financing facilities and sizeable unencumbered landbank,” MARC said.