MARC RATINGS AFFIRMS RATINGS ON S P SETIA'S ISSUANCES

MARC Ratings has affirmed its ratings on S P Setia Berhad's sukuk programmes as follows:

- RM3.5 billion Islamic Medium-Term Notes (IMTN)/Perpetual Sukuk Programme with a sublimit of RM1.5 billion on the Perpetual Sukuk at AAIS/A+IS
- RM500.0 million Islamic Commercial Papers Programme at MARC-1IS
- RM3.0 billion IMTN Programme at AAIS

The outlook on the long-term ratings is stable.

The ratings reflect S P Setia's entrenched domestic market position in township development, strong sales track record, and sizeable unbilled sales that would support earnings visibility over the medium term. The ratings also incorporate a one-notch uplift on MARC Ratings' assumption of support from parent Permodalan Nasional Berhad (PNB), if needed.

S P Setia's ongoing domestic projects carried a gross development value (GDV) of RM7.6 billion as at end-1Q2025, from 37 developments across various established townships in the Klang Valley, Johor and Penang; total domestic unbilled sales amounted to RM3.1 billion. Completed inventories declined to RM1.3 billion compared to RM1.8 billion in 2023, reflecting the group's approach of staggering launches to avert inventory build-up. New launches would focus on the domestic market in its existing townships; these would carry an estimated combined GDV of RM5.0 billion over the near term.

The residential apartment project in central Melbourne, Australia, that was recently launched in October 2024, has received a positive response with a booking rate of 50% as at date. The project has a GDV of AUD887.0 million and comprises 870 residential apartment units. Construction will be carried out in three phases; this is set to begin in 2026 and expected to be fully completed by 2029. In Vietnam, S P Setia has obtained land development rights to undertake further development within its existing townships, located in close proximity to Ho Chi Minh City.

The group's expansion into i