MARC Ratings has affirmed its ratings of MARC-1IS/AA-IS on UEM Sunrise Berhad’s Islamic Commercial Papers (ICP)/ Islamic Medium-Term Notes (IMTN) Programme (ICP/IMTN-3) with a combined nominal value of RM4.0 billion. Concurrently, the rating agency has also affirmed its rating of AA-IS on UEM Sunrise’s two IMTN Programmes (IMTN-1 and IMTN-2) of RM2.0 billion each. The ratings outlook is stable.
UEM Sunrise’s established property development track record, sizeable landbank, and healthy liquidity underpin its ratings, tempered by modest earnings relative to borrowings. The long-term ratings also incorporate a one-notch uplift from implicit parental support, given that the company is a key property development subsidiary of UEM Group Berhad.
As at end-June 2025, UEM Sunrise’s ongoing domestic projects had a combined gross development value (GDV) of RM4.8 billion, with about 76% located in the Klang Valley. The overall average take-up rate stood at around 70%. Unbilled domestic sales of RM2.1 billion provide earnings visibility over the next four years. For 2025, the group had planned launches amounting to a total GDV of RM2.0 billion (versus RM904.3 million a year earlier), of which around RM413 million were launched during 1H2025. The group stands to benefit from renewed demand for developments in Johor, where it holds a sizeable landbank of about 4,560 acres (including joint-venture held land). Inventory stood low at RM133.9 million as at end-June 2025, which is expected to remain steady in the near term given the strong sales of nearly completed projects.
In the overseas market, UEM Sunrise’s high-rise residential development in Subiaco East, Perth, with a GDV equivalent to about RM1.4 billion, was launched in July 2025, followed by launches in Kuala Lumpur and Singapore in September 2025, which have received encouraging interest. Construction is scheduled to begin in 3Q2026 and will be completed in 2029. The wholly-owned project will be funded through bank borrowings and internal funds, further strengthening UEM Sunrise’s presence in Australia, where it previously completed several successful projects. Separately, the collaboration with Greystar Real Estate Partners, a US-based build-to-rent operator, signed in 2023 for the Collingwood residential project in Melbourne was terminated on 1 July 2025 after Greystar failed to meet the required equity conditions.
In 1H2025, UEM Sunrise recorded higher y-o-y revenue of RM860.1 million and pre-tax profit of RM64.1 million (1H2024: RM430.2 million and RM36.8 million). While sales from ongoing projects were strong, the group’s overall development scale continued to constrain earnings and debt coverage. As of end-June 2025, OPBITDA interest coverage remained low at 2.0x, and debt-to-OPBITDA was elevated at 15.7x. Group borrowings stood at RM4.2 billion, translating into a debt-to-equity ratio of 0.60x. Additional borrowings are anticipated over the next few years to fund the Subiaco project in Perth, potentially raising gross leverage to around 0.70x. Cash and bank balances including short-term investments remained healthy at RM1.4 billion as of end-June 2025.