RAM Ratings upgrades Sunway REIT's CCR to AA1/Stable; related debt issue ratings also upgraded

RAM Ratings has upgraded the corporate credit ratings (CCRs) of Sunway Real Estate Investment Trust (Sunway REIT or the REIT) to AA1 from AA2, with a stable outlook and affirmed its short-term CCR at P1. The ratings of debt facilities issued under its funding vehicles have also been upgraded or affirmed, as applicable (see table). The suffix (s) indicates rating enhancement from inter-company payments by the REIT.

Issuer                         Facility                                        Rating/Outlook
SUNREIT Bond Berhad             RM10 bil Medium Term Note (MTN) Programme (2012/2047) 
                         ? Secured MTN                                         AA1(s)/Stable
                         ? Unsecured MTN                                        AA1(s)/Stable
SUNREIT Perpetual Bond Berhad RM10 bil Perpetual (Perps) Programme                 AA3(s)/Stable
SUNREIT Capital Berhad         RM3 bil Sustainability-Linked Commercial               P1(s) 
                                Papers Programme (2026/2033)

The rating upgrade reflects RAM's assessment of a 'high likelihood' of extraordinary support from Sunway Berhad, if needed, and our view of Sunway Berhad's now stronger credit profile. We consider the REIT's strategic role in the Group's build-own-operate and capital recycling model, common branding, Sunway Berhad's significant ownership of both the REIT and its manager, and the REIT's material contribution to the Group's assets and recurring earnings. Sunway REIT's CCR therefore benefits from a one-notch uplift from its standalone credit strength.

The ratings also recognise Sunway REIT's continued strength as a market leader as Malaysia's second largest M-REIT, with 28 assets across the retail, hospitality, office and industrial segments. Its business profile is anchored by prime assets, especially in the mature and integrated Sunway Cit