[RAM] RAM Ratings affirms AAA rating of Suria KLCC's MTN Programme

RAM Ratings has affirmed the AAA/Stable rating of Suria KLCC Sdn Bhd’s (Suria KLCC or the Company) RM600 mil Islamic Medium-term Notes (MTN) Programme (2014/2044). 

Suria KLCC is the owner and property manager of the iconic Suria KLCC Mall (the Mall), located within the Kuala Lumpur City Centre (KLCC) development. The rating affirmation reflects the Company’s conservative financial profile and Suria KLCC Mall’s resilient performance, thanks partly to the management’s proactive tenant reconfiguration initiatives amid the challenging operating retail landscape. 

For 8M FY Dec 2023, the Mall’s average rental and occupancy rates improved to RM36 psf and 95.6% while Suria KLCC’s operating profit before depreciation, interest and tax margin stayed a commendable 83.2% (FY Dec 2022: RM35 psf, 94.8% and 84.5%). Supported by campaigns to boost retail activities and the ongoing return of office workers, the Mall’s moving annual total tenant sales and footfall for the first half of 2023 grew a respective 37% and 48% y-o-y. 

As at end-September 2023, about 68% of leases (by area) expiring in 2023 were renewed, with the rest still under negotiation. The Mall signed up 16 new tenants in 1H 2023 including four food and beverage outlets that fully take up reconfigured space previously occupied by Rasa Foodcourt. Leases renewed year-to-date commanded a positive rental reversion of 1% with step-up provisions. These coupled with a well distributed lease maturity profile are expected to sustain performance of the Mall. 

Suria KLCC is 60%-owned by KLCC Property Holdings Berhad while the remaining 40% is beneficially owned by CBRE Investment Management. The relationship between Suria KLCC and its indirect shareholders – KLCC (Holdings) Sdn Bhd (KLCCH) and Petroliam Nasional Berhad (PETRONAS) – is deemed “close” (as defined in RAM’s Criteria on Parent-Subsidiary Rating Links), given that the Mall is a core component of the KLCC development, a prime real estate investment of KLCCH. The development is also closely associated with PETRONAS – the major lessee of the prominent PETRONAS Twin Towers.


Analytical contacts
Joel Thum            
(603) 3385 2517                
joel@ram.com.my

Tan Han Nee
(603) 3385 2529
hannee@ram.com.my

Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my