Vicinity Centres scores A-grades from Moody’s and S&P
Credit ratings firms Moody's, and Standard and Poor's, hold a positive outlook on the recently merged retail property group, Vicinity Centres.
Both firms issued investment-grade credit issuer ratings in the last two weeks with Moody's providing an A2 rating, while S&P affirmed its A- rating, describing the group as "stable".
Moody's vice president senior analyst, Maurice O'Connell, said the firm expected Vicinity Centres to maintain its conservative financial profile, with a net debt to tangible assets of 25 to 35 per cent.
"The A2 issuers rating reflects Vicinity's strong market position in the Australian retail property sector, following its creation with the merger of Novion Property Group and Federation Centres in June 2015," he said.
"At the same time, the rating recognises the real estate investment trust's stable and predictable level of operating income, as well as its extensive and diversified portfolio of predominantly regional and sub-regional retail shopping centres in Australia."
Following the announcement of its rating of Vicinity, Moody's noted the strong level of demand for the group's assets was "illustrated by the portfolio's exceptionally high and consistent occupancy rates of around 99 per cent each year for the past decade".
"Furthermore, the fixed rent structure of the portfolio's leases, typically based on fixed annual rent increases of around five per cent should underpin continued growth in net operating income," Moody's reported.
AUTHOR
Nicholas O'Donoghue
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
