[RAM] RAM Ratings assigns highest rating, AAA to IGB REIT and its debt securities under IGB REIT MVS Capital

RAM Ratings has assigned AAA/Stable/P1 corporate credit ratings to IGB Real Estate Investment Trust (IGB REIT or the REIT), premised on its superior financial profile and resilient portfolio performance that are anchored by exceptional asset quality. We have concurrently assigned respective long-term ratings of AAA(s)/Stable to the secured and unsecured Medium Term Notes (MTNs) under IGB REIT MVS Capital Berhad’s (the Issuer) MTN programme of up to RM5 bil. The Issuer, a wholly-owned subsidiary, is the second financing vehicle of IGB REIT.

Established in 2012, the REIT owns two flagship retail malls – Mid Valley Megamall and The Gardens Mall – strategically located within the Mid Valley City integrated development. The properties, with 2.6 mil sf of commercial net lettable space, are complemented by three hotels and serviced residences as well as seven office buildings that provide stable and steady daily footfall. The properties also benefit from a mature urban catchment area with a well-connected infrastructure network, supporting consistently high footfall. As of end-December 2024, the combined valuation of the two assets stood at RM5.45 bil, making IGB REIT one of the top five Malaysian REITs (M-REITs) by portfolio size and the second largest by market capitalisation. The planned acquisition of The Mall, Mid Valley Southkey (MVS Mall) in Johor Bahru is expected to increase the REIT’s total portfolio value to RM8.10 bil by end-2025, geographically diversifying the portfolio and reducing single-asset concentration risk.

The three malls’ performance is resilient, supported by a well-diversified tenant mix of over 1,100 tenants, with a well-spread lease profile. The portfolio’s three-year average occupancy rate stayed between 96.7% and 98.3%, with sustained improvement in average rent observed. MVS Mall, as an unseasoned property, will be key to the REIT’s future earnings, given expected traction of the Mid Valley Southkey masterplan integrated development. 

The REIT’s financial profile is a main rating strength, with its leverage ratio at 21% as at end-June 2025. The REIT’s indebtedness is limited to the RM1.2 bil rated commercial asset-backed notes (AAA/Stable) issued under IGB REIT Capital Sdn Bhd, which are expected to mature in 2027. Even after factoring in an additional RM1.03 bil of borrowings to part-fund the acquisition of MVS Mall, the leverage ratio will climb only slightly to 27%, well below the industry median of 41% and among the lowest recorded by M-REITs. IGB REIT’s fixed charge coverage was a robust 8.63 times as of end-June 2025 and is projected to average a healthy 8.00 times between 2025 and 2028, underpinned by robust property earnings. 


Analytical contacts
Joel Thum
(603) 2708 8232 
joel@ram.com.my

Lim Chern Yit
(603) 2708 8302 
chernyit@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my