Avaland Gears Up For Next Growth Cycle With Green Financing: Sets Up Sukuk Programme Of RM1.0 Billion
Subang Jaya – Award-winning property developer Avaland Berhad (“Avaland” or the “Group”) (formerly known as MCT Berhad) has successfully lodged its RM1.0 billion Islamic Medium-Term Notes (“Sukuk”) Programme based on the Shariah principle of Murabahah (via Tawarruq Arrangement) (“Sukuk Programme”) with the Securities Commission Malaysia (“SC”) in accordance with the SC’s Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (“LOLA Guidelines”).
The Sukuk Programme will allow Avaland to issue Sustainable and Responsible Investment (“SRI”) Sukuk, ASEAN Sukuk, SRI-linked and ASEAN sustainability-linked Sukuk to fund, amongst others, Avaland’s sustainable developments, land acquisitions and capital expenditures. Alliance Islamic Bank Berhad (“Alliance”) and AmInvestment Bank Berhad (“AmInvestment Bank”) are the Joint Principal Advisers, Joint Lead Arrangers and Joint Lead Managers for the Sukuk Programme.
The Sukuk Programme was assigned a long-term credit rating of AA3 with a stable outlook by RAM Rating Services Berhad. This came on the back of Avaland’s successful transformation and strong earnings visibility backed by its unbilled sales of RM852 million as at 31 March 2024.
Avaland aims to leverage on this new programme to fund continued launches in its three-tier brand architecture, namely:
▪ AVA Luxe: an upscaled luxury brand offering a high-end and prestigious development;
▪ AVA Prime: a brand catering to the middle-income segment with great emphasis on lifestyle and wellness; and
▪ AVA Ria: an affordable housing solution aiming to deliver quality homes at reasonable prices to the Rakyat.
All of the above developments shall be GreenRE certified to underscore Avaland’s commitment towards the delivery of sustainable homes.
Apollo Bello Tanco (“Pol”), Chief Executive Officer of Avaland said, “We are thrilled to be partnering with Alliance and AmInvestment Bank to establish our first Sukuk Programme. We believe that the proceeds to be raised under this programme will further fuel Avaland’s growth following the positive response to all of our new launches in 2024. This programme also marks a significant phase in our sustainability journey as the synergy between our sustainability performance and financing metrics are in line with our efforts towards becoming a leading sustainable property developer as part of our Sustainability Roadmap.”
Teoh Chu Lin, Group Chief Corporate Banking and Capital Markets Officer of Alliance Bank Malaysia Berhad said, “At Alliance Bank, we are honoured to support Avaland on its sustainability journey. Avaland has not only demonstrated their leadership within the industry but has also showcased a sense of responsibility towards the environment and wellbeing of future generations. We have always been supportive of the business community and ensuring we can provide solutions to achieve their goals throughout every stage of their entire business lifecycle. Our capital markets team brings deep industry and product expertise that enable us to offer clients advice and tailored solutions.”
Tracy Chen, Chief Executive Officer of AmInvestment Bank, commented, “We are honoured to have been entrusted with Avaland’s Sukuk Programme in our capacity as a Joint Principal Adviser, Joint Lead Arranger and Joint Lead Manager and believe that this Sukuk Programme is established at a time when market conditions are highly favourable for quality and sustainable developers like Avaland. Avaland’s proposed issuance of RM300 million 5-year AA3-rated sustainability Sukuk reaffirms its sustainability commitment to the market while enabling it to capitalise on the low profit rate environment and strong market liquidity. We are confident that Avaland’s upcoming issuance will support its sustainable developments to create long-term generational value for its buyers and stakeholders”.
Avaland has launched four new developments in 2024 thus far, namely Phase 2 of Casa Embun, Amika Residences, Aetas Seputeh and Anja Residences and Signature Retail with a combined GDV of RM1.4 billion.
Avaland also won four awards at the 2024 Asia Pacific Property Awards held recently, including 5-star awards for Aetas Seputeh and Amika Residences, of which the two will represent the Asia Pacific region in the International Property Awards in September. Each of its new projects have been well-received by the market as evidenced by the average take-up rate of approximately 50%.
Moving forward, Avaland is on the look-out for new land-banking opportunities as the Group’s growth plans will be driven by its proven business model of quick turnaround of newly acquired land. The swift approach underscores Avaland’s commitment to seizing market opportunities efficiently, capitalising on emerging trends, and strategically deploying proceeds raised from the Sukuk Programme to fund new land acquisitions and developments.
Avaland further announced its immediate launch of a Sustainability Sukuk Framework that complies with:
(a) the SC’s SRI Sukuk Framework as set out in the LOLA Guidelines;
(b) ASEAN Capital Markets Forum’s Green, Social and Sustainability Bond Standards; and
(c) International Capital Market Association’s Green, Social and Sustainability Bond Principles.
The framework has been independently verified by RAM Sustainability Sdn Bhd and conferred ratings of up to Tier 1 environmental benefits and Tier 3 social benefits. Following this, Avaland plans to raise RM300 million via a 5-year AA3 rated Sukuk by July 2024, subject to market conditions.
