Fitch gives S-REITS negative rating

Source : Channel NewsAsia – 29 Sep 2009

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.