[RAM] RAM Ratings affirms AAA/Stable rating of sukuk issued by KLCC REIT's funding conduit Midciti Sukuk

RAM Ratings has affirmed the AAA/Stable rating of Midciti Sukuk Berhad’s (Midciti or the Issuer) RM4.0 bil Sukuk Murabahah Programme (2014/2044) (the Programme). 

The affirmation reflects the superior assets and lease profile of KLCC Real Estate Investment Trust (KLCC REIT or the REIT), its conservative balance sheet and robust debt coverage metrics. Midciti, which serves as the REIT’s funding conduit and has no operations of its own, relies on inter-company transactions with the REIT to meet its obligations under the Programme. 

The rating also takes into account KLCC REIT’s very strong relationship with its ultimate parent, Petroliam Nasional Berhad (PETRONAS) – the national oil company which holds a 66.94% effective stake in the KLCCP Stapled Group. The REIT’s properties are integral to the wider KLCC development, with most of these assets are leased to PETRONAS. These factors underpin our view that KLCC REIT is highly likely to receive extraordinary support from PETRONAS in the remote event that the REIT comes under financial distress. 

KLCC REIT’s earnings remained resilient in FY Dec 2025, with revenue and net property income broadly stable at RM578.0 mil and RM545.2 mil¹, respectively, supported by the long-tenured triple-net leases with PETRONAS. A rental step-up of approximately 4% at Menara ExxonMobil in 2025 is expected to provide further earnings uplift. At the retail podium of Menara 3 occupancy recovered to 97.0% (end-December 2024: 80%), following the onboarding of new tenants during the year. 

The REIT maintained very low leverage and debt to operating profit before depreciation, interest, and taxes ratios of 0.14 times and 2.72 times, respectively, as at end-December 2025. Fixed charge coverage stayed robust at 8.28 times (FY Dec 2024: 8.35 times). Separately, the Issuer has upsized the Programme limit to RM4.0 bil and revised its principal terms and conditions. It also has refinanced its existing RM500 mil Islamic medium-term notes, which matures on 24 April 2026. This exercise is expected to improve the REIT’s overall debt maturity profile and reduce annual refinancing needs, which stood at 43.1% as at FY Dec 2025.