Fitch rates two property REITs
Fitch Ratings has awarded stable outlooks to two Australian REIT issues in light of their leading positions in the Australian real estate market.
Shopping centre company Scentre Group was rated as A/Stable while commercial property group Mirvac Group was rated as A-/Stable. The companies hold two of the largest REITs in Australia at $54 billion and $11 billion respectively.
Fitch said the high rating reflected the high visibility of future rental income streams, their leading positions in the market and their commitment and flexibility in managing financial structures to levels commensurate with their ratings.
Both firms were able to respond to changing demand trends, Fitch said, which reduced the cyclical valuation volatility of their portfolios and to take advantage of the prime locations of their properties.
However, the ratings agency noted REITs which had exposure to lower grade and regional properties were likely to come under pressure in the future as the property market begins to cool, which would lead to valuation declines.
These types of REITs would be worse-affected than those which had exposure to high quality assets in major domestic cities.
AUTHOR
Laura Dew
Recommended for you
Selfwealth has provided an update on the status of its scheme implementation deed with Bell Financial Group as well as whether rival bidder Svava remains in the picture.
Magellan Financial Group has reported its first half FY25 results while appointing a new chief financial officer and promoting Sophia Rahmani to chief executive.
Schroders Australia has launched two active ETFs and plans to further expand its listed range over the year ahead.
Platform Netwealth has reported its financial results for the first half of FY25, reporting an 80 per cent increase in net flows, with its CEO viewing a “huge opportunity” from private assets.
