MARC Ratings has assigned preliminary ratings of AAA, AA and A to Trusmadi Capital Sdn Bhd’s RM248 million Class A, RM46 million Class B, and RM46 million Class C Issue 3 Medium-Term Notes (MTN). The outlook on all ratings is stable.
Trusmadi Capital is a special-purpose funding vehicle of Maybank Trustees Berhad, acting on behalf of Sentral REIT. Trusmadi Issue 3 comprises up to RM340 million rated issuances and RM175 million unrated issuances under its existing RM3.0 billion MTN Programme. Proceeds will be used to redeem RM337 million of outstanding Trusmadi Issue 1 issuances maturing on 17 December 2026. Upon redemption, the charge over Menara Shell securing Trusmadi Issue 1 will be released and transferred to Trusmadi Issue 3. Menara Shell is a 33-storey Grade A office building with a net lettable area (NLA) of 557,458 sq ft, strategically located within the KL Sentral transportation hub.
The ratings on the respective Trusmadi Issue 3 MTN classes reflect their loan-to-value (LTV) ratios, which stand within MARC Ratings’ benchmarks for the respective rating levels. The LTV ratios are based on MARC Ratings’ income capitalisation approach, using a stabilised net operating income (NOI) of RM43.3 million. The stabilised NOI represents the average NOI for 2024 to 2028, comprising actual performance for 2024 to 2025 and projections for 2026 to 2028. This results in a valuation of RM577.0 million for Menara Shell, representing a 14.2% discount to its independently assessed market value of RM672.5 million as of 31 December 2025.
The stabilised NOI incorporates assumptions on increased occupancy and lease renewals in 2027, and the potential impact of Shell Malaysia Trading Sdn Bhd’s (Shell) lease expiry in October 2028, assuming the vacated space is fully re-let. Tenant replacement risk remains significant given the building’s tenant concentration, with Shell, a wholly-owned subsidiary of Shell Plc, occupying 54.7% of total NLA. This risk is partly mitigated by a positive covenant requiring the issuer, if Shell elects not to renew, to secure replacement tenants, with specified minimum average tenure and average rental rate which would be supportive of the LTV ratios.
Shell’s non-renewal without timely replacement would materially weaken Menara Shell’s occupancy and cash flow. However, the transaction provides a clear remedial framework through measures either to reduce outstanding debt, place additional cash in the reserve account, or provide additional income-generating property as collateral. These measures provide additional protection to maintain asset and cash flow coverage. Menara Shell’s strategic location within KL Sentral and Grade A office status also support its competitiveness amid the oversupply in the Klang Valley office market.
Menara Shell recorded NOI of RM21.5 million in 1H2026. Occupancy improved to 88% as at end-2025 from 82% in 2024. Together with the increase in average rental rate to RM7.56 psf from RM6.96 psf, the higher occupancy is expected to support stronger NOI from 2026. Projected NOI over the next three years is sufficient to support the LTV ratios of the respective rated classes.