[RAM] RAM Ratings affirms Pelaburan Hartanah's AAA rating

RAM Ratings has affirmed Pelaburan Hartanah Berhad’s (PHB or the Group) AAA/Stable/P1 corporate credit ratings and the same ratings of its RM5.0 bil Islamic Commercial Papers (2024/2031)/Islamic Medium-Term Notes (2024/-) Programme.

PHB is mandated to boost bumiputera ownership of prime commercial real estate, aligning with the Government of Malaysia’s (GoM) broader national development agenda to promote economic participation of the community. As a wholly-owned subsidiary of the GoM, PHB advances its mandate through managing Amanah Hartanah Bumiputera (AHB), a unit trust fund which had beneficial ownership of 21 out of 26 properties owned by the Group as at end-December 2024. Given its role, PHB is considered highly important to the government, both politically and institutionally. Government support has been strong, in the form of annual grants and tax exemptions. Accordingly, PHB’s ratings are underpinned by the robust credit fundamentals of the GoM.

In FY Dec 2024, PHB’s revenue increased by a robust 17% to RM464 mil (FY Dec 2023: RM396 mil), primarily driven by an uptick in occupancy and strong rental growth. Notwithstanding the higher revenue, property-related costs are well-contained, rising only 1.2% during the year as the Group started bringing its facility and lease management functions in-house. As a result, its net property income margin improved to 61% from 56% the previous year. Excluding property lease liabilities to AHB, the Group’s gearing and cash to short-term debt ratios stood at 0.29 times and 4.1 times, respectively, as at end-fiscal 2024 (end-2023: 0.23 times and 1.2 times). Gearing is expected to increase as its pipeline acquisitions of completed assets are to be partly funded by borrowings. PHB’s overall portfolio quality is average and still somewhat concentrated in the office sector though its portfolio rebalancing and rejuvenation exercise has yielded some improvements. Revenue contribution from the office portfolio decreased to 47% in 2024 from 55% in 2019.

Looking ahead, PHB’s property performance will remain challenged due to market conditions, i.e. the existing office space oversupply and rising costs. However, PHB’s continuous portfolio rebalancing efforts, the maturing of its recently completed assets and further cost savings from the insourcing of facility and lease management functions should help moderate these risks.


Analytical contacts
Lee Yee Von
(603) 2708 8217
yeevon@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my