Fitch Ratings has published its REIT Report Quarterly for fourth-quarter 2014, which highlights research during the past quarter.
In its Dec. 16, 2014 outlook report, Fitch stated that it had upgraded its sector outlook for U.S. REITs to Positive from Stable for 2015. This is due to secular changes that Fitch expects will continue for the foreseeable future. Among them are namely portfolio focus and tactical diversification, lower risk growth strategies, good liquidity management, minimal share repurchase risk and management focus on maintaining strong credit metrics. The Rating Outlook remains Stable.
In its Dec. 16, 2014 outlook report, Fitch stated that sector leverage for EMEA real estate issuers in 2015 should stay at a loan-to-value (LTV) ratio of between 35% and 45% and net debt/EBITDA should average around 7.5x, a level that is moderate for this stage in the economic cycle. Issuers that have benefited from strong appreciation in values due to safe-haven flows such as British Land, Hammerson and PSP have an LTV below the sector average. This conservative approach insulates balance sheets from a reversal in the cycle.
In its Dec. 4, 2014 outlook report, Fitch stated that its outlook for Latin America real estate remains stable. Fitch expects limited to no downgrades for Latin American real estate companies during 2015. Fitch anticipates credit quality to remain stable based on the sector's adequate access to capital, good liquidity, stable fixed-charge coverage, low leverage and steady property-level fundamentals. These positive elements will continue to be partially counterbalanced by limited geographic and property diversification.
In its Dec. 2, 2014 outlook report, Fitch stated that it expects its ratings on Singapore REITs to remain stable in 2015, although hospitality REITs are expected to face more downside risks than other sectors.
Other items in this edition of Fitch's 'REIT Report Quarterly' include:
--An overview of recent rating actions;
--Summaries of recently published REIT reports and criteria;
--Links to recent Fitch research.
'REIT Report Quarterly' is available by clicking on the above link or at 'www.fitchratings.com' under the following headers:
Ratings and Research >> Corporate Finance >> REITs >> Research
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research
--2015 Outlook: U.S. Equity REITs;
--2015 Outlook: EMEA Property and Real Estate;
--2015 Outlook: Latin America Real Estate;
--2015 Outlook: Singapore Healthcare REITs;
--2015 Outlook: Singapore Industrial REITs;
--2015 Outlook: Singapore Hospitality REITs.
Applicable Criteria and Related Research: REIT Report Quarterly
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=842688
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