Tag Archives: Singapore REITS

Ratings agency, Fitch, said Singapore real estate investment trusts or S-Reits still face questions about their financial flexibility and refinancing ability.

In a research report, Fitch noted that S-reits have largely been able to refinance their maturing debt obligations in 2009.

As at June this year, Fitch pointed out that S-Reits are moderately geared at an average of 31 percent.

It added that though S-reits have been negatively affected by the financial crisis, they have responded by taking several positive steps.

These include sourcing for bank loans in advance for refinancing purposes and reducing their expenditure and acquisition plans.

But Fitch has maintained a negative rating for the sector due to the sector’s negative asset performance expectations.

Source : Channel NewsAsia – 29 Sep 2009

Singapore REITs (S-REITs) have, to a large extent, refinanced their maturing debt obligations in 2009 and have benefited from a recent share price recovery, though questions still remain regarding their financial flexibility and refinancing ability, notes Fitch Ratings in a new special report.

In the report, the agency discusses some of the aspects of S-REITs’ structures, highlighting its concerns, and discusses the impact of the financial crisis and the outlook for S-REITs and their ratings as they emerge from the crisis.

S-REITs have been negatively affected by the financial crisis as a limited availability of debt financing and stock price corrections forced them to restrict their previous aggressive asset acquisition programmes and concentrate on survival and tenant retention in a difficult market. S-REITs responded to the changing market dynamics by sourcing bank loans in advance for their refinancing and by reducing their capex and acquisition plans, and development pipelines; some S-REITs have successfully issued equity. These steps are positive, from a ratings standpoint, but do not address other aspects of the debt structure and liquidity profile on which Fitch continues to have concerns. Continue reading →