MARC Ratings has affirmed its ratings on Putrajaya Holdings Sdn Bhd’s (PJH) sukuk programmes as follows:
- RM1.0 billion 20-year Sukuk Wakalah Programme (due in 2041) at AAAIS
- RM370.0 million Sukuk Musharakah Programme (due in 2030) at AAAIS; and
- RM3.0 billion Sukuk Musharakah Programme (due in 2032) at AAAIS
The outlook for all ratings is stable.
The ratings affirmation is premised on the credit strength of the Malaysian government as the principal lessee of government buildings in Putrajaya under individual long-term lease-and-sublease agreements with PJH. The sizeable rental income stream is sufficient to meet the financial obligations under the rated programmes. PJH’s property development track record and the credit strength of its government-linked major shareholders underpin the ratings. Aside from government buildings, PJH has undertaken residential and commercial property development, mainly in Putrajaya, to complement the overall development of the federal administrative capital.
In 2024, PJH continued to receive annual sublease rental income (including from commercial buildings) of about RM1.4 billion, which is more than adequate to meet principal repayments of RM530.0 million in FY2025 and RM470.0 million in FY2026. Total revenue remained around RM2.0 billion, with the property development segment contributing RM239.2 million in 2024 (2023: RM234.1 million). Borrowings declined to RM2.0 billion in 2024 from RM2.7 billion in 2023, from repayments made under its various sukuk programmes. As a result, the group’s debt-to-equity (DE) ratio improved to 0.19x (2023: 0.26x). MARC Ratings notes that a significant proportion of the rated programmes’ outstanding issuances are scheduled to mature in 2026, which will continue to reduce the group’s borrowings. The rating agency notes that the group will also continue its efforts to monetise completed inventories, which stood at RM319 million as at end-December 2024, through targeted marketing campaigns and promotional activities.
In June 2025, the federal government announced the development of Kota MADANI, a township in Precinct 19, Putrajaya. PJH has been appointed as the master developer of the project, which will cover about 102 acres, with approximately 10,000 residential units to be launched in phases, at an estimated total development cost of RM4 billion. The project is currently in the planning stage; the total development cost and funding model are still in the midst of being finalised with the Public Private Partnership Unit (UKAS). The rating agency understands that there will be no direct government funding in the early stages of the project. Instead, the development is expected to adopt a build-lease-maintain-transfer (BLMT) structure, which will involve PJH taking on the upfront development risk before transferring ownership of the completed assets back to the government at a later stage.