GCR has considered the progression in portfolio quality since the Octodec and Premium Properties Limited merger in 2014. The REIT continues to demonstrate a clear strategic focus, with progression in its portfolio value underpinned by urban renewal initiatives. Overall, Octodec’s portfolio has achieved moderate YoY growth in value in recent years, with the disposal of non-core properties partly offsetting the impact of enhancements.
Factors that could trigger rating action may include
Positive change: Renewed strong earnings growth, while maintaining conservative gearing policies and enhancing the liquidity profile. This would likely entail a sustainable reduction in vacancy rates, cost rigour, and competitive weighted average rental rates.
Negative change: Failure to sustain a smoothed-out, medium term debt expiry profile. An erratic earnings profile that curtails the REIT’s debt service and overall credit risk metrics.