RAM Ratings said the decision was based on the company’s resilient earnings and strong financial metrics, underpinned by Suria KLCC Mall’s superior asset quality as well as the company’s lowly geared balance sheet and robust debt-protection measures, despite a generally weak retail industry.
As at end-July 2017, the mall maintained a relatively high occupancy rate of 96%, albeit lower than the 98% of 2015 in its ongoing tenant-remixing exercise. RAM Ratings believes that the mall’s occupancy level should return to its historical levels once the exercise concludes in 2018.
RAM Ratings also pointed out that around half of the leases expiring in 2017 have been renewed at 7% rental reversions (editor's note: a change in the amount of rent to be paid). "We believe the mall will face minimal difficulty in securing lease renewals and procuring new tenants for its remaining vacant space," the consultancy said.