[MARC] MARC Ratings assigns preliminary AA+IS and MARC-1IS ratings to TH Properties’ proposed sukuk issuances

MARC Ratings has assigned preliminary AA+IS/MARC-1IS ratings to TH Properties Sdn Bhd’s proposed Islamic Medium-Term Notes (IMTN) and Islamic Commercial Papers (ICP) Programmes with a combined aggregate limit of up to RM750 million. The outlook on the long-term rating is stable.

The ratings reflect TH Properties’ status as a wholly-owned property development and facilities management subsidiary of Lembaga Tabung Haji (TH), a statutory body established under the Tabung Haji Act 1995 (Act 535). TH provides strong operational and financial support through close integration, business alignment, and board representation, and exercises oversight of TH Properties’ strategic, financial, and investment decisions. Financial support has been demonstrated through capital advances, direct borrowings, and capital restructuring. In view of TH’s statutory role, systemic importance, and past government support, MARC Ratings views the group’s linkage as credit positive.

Facilities management has been the primary earnings driver, contributing over 50% of TH Properties’ consolidated revenue over the past three years. This is underpinned by long-term, multi-year renewable contracts with TH to manage and maintain TH’s nationwide property portfolio exceeding five million sq ft. As at end-2025, outstanding facilities management contracts amounted to RM1.1 billion, of which RM770.1 million relates to TH. TH Properties also manages privately owned buildings. In addition, TH Properties holds a RM635 million, 10-year federal government concession which commenced on 1 December 2018, to manage buildings in the northern region. The concession is undertaken via a 51%-owned joint venture with Gemilang Maintenance Services Sdn Bhd.

Property development is primarily undertaken on land owned by TH. Bandar Enstek, the company’s flagship township, is being developed by TH Properties as the exclusive developer under a phase-based Business Arrangement Agreement, with TH bearing holding costs and leverage. As at end-2025, Bandar Enstek had 2,549.2 acres of remaining landbank, supporting medium- to long-term development visibility. Launched in 1998, the 5,119-acre township has an estimated gross development value (GDV) of RM14.7 billion, with ongoing GDV standing at RM60.1 million reflecting its phased development. The development includes Techpark@enstek, a 1,750.8-acre industrial park accredited with Halal Malaysia status. As one of only 14 accredited industrial parks nationwide, it is eligible for tax incentives, thereby strengthening its value proposition.

Revenue surged to RM455.3 million in 2025 from RM154.5 million in 2024, mainly driven by land sales at Techpark@enstek. Cash flow from operations rebounded to a positive RM139.7 million in 2025 from a negative RM17.6 million in 2024, which was due to development costs and working capital requirements. It is expected to be supported by further developments in Bandar Enstek and stable facilities management income. Leverage remains very low, with a debt-to-equity (DE) ratio of 0.03x, reflecting funding largely via shareholder advances. Under the proposed programme, the planned initial drawdown of RM600.0 million to fund developments in Kota Semarak and Techpark@enstek is expected to raise the DE ratio to around 0.65x. As at end-2025, unutilised facilities stood at RM54.9 million.

Farhan Darham, +603-2717 2945/ farhan@marc.com.my
Yazmin Abdul Aziz, +603-2717 2948/ yazmin@marc.com.my