Industry Research: Real Estate Investment Trusts

Image placeholder
Soft equity prices signal weakening REIT financial profiles
  • Industry Research: Real Estate Investment Trusts
  • Year : Mar 2020
Access Now
Summary

GCR expects the financial profiles of South African REITs to weaken, as the range of funding options available to them increasingly narrows. Base portfolio valuations have stagnated or declined over the last 18 months, and with further value erosion likely, funds with high gearing and/low covenant headroom will struggle to realise capital from new equity or asset sales in time to stabilise their leverage ratios.

Additional Information

Although all REITs are facing a challenging medium-term outlook, GCR does not expect the impact of the funding pressure to be uniform across the sector. Specifically, funds whose LTVs are managed at 30%-35% or lower, continue to depict sustained income stability, sound debt service, and well-managed liquidity profiles are expected to sustain strong or stable credit risk profiles

Related Publication

Industry Research: Real Estate Investment Trusts

The rating of CC(ZA) accorded to Rebosis Property Fund is not derived from the ACE but is rather a factor of expected default scenario.The graphs p...

Vukile Property Fund Ltd (2018-08)

A Credit Rating report is a research report providing detailed analysis utilised by GCR in the accordance of a Credit Rating.

Rating Securitisation Transactions Involving Intermediate SPVs

This report explains GCR’s approach to the risks related to each of these SPVs to rate the debt issued by the Issuing SPV. Please note that t...

Available Purchase Options: