New York, March 17, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 10 March 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for these rated entities was REITs and Other Commercial Real Estate Firms Methodology published in July 2021 Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
REITs and Other Commercial Real Estate Firms Methodology
Scale: Scale is considered because it is an indicator of an issuer's ability to support a stable or growing market position. Larger scale can make a commercial real estate firm more resilient to changes in demand and better able to absorb changes in costs. An indicator of scale is gross assets.
Business Profile: The business profile of a REIT or commercial real estate firm provides an important indication of the stability of a firm's portfolio based on several measures of diversification, the tenor of its leases and quality of its lessees, its market position and scale, and its operating environment.
Liquidity and Access to Capital: Liquidity management and access to capital are important considerations for all commercial real estate firms because their businesses are capital-intensive, and they can be subject to cycles in access to credit and capital markets. Tax rules also limit the ability of REITs to retain cash, thus requiring them to have ongoing access to external sources of capital to support their businesses. The amount of a commercial real estate firm's unencumbered assets relative to gross assets is also considered because properties that are free and clear of mortgages are sources of alternative liquidity via the issuance of property-specific mortgage debt, or even sales.
Leverage and Coverage: Leverage and coverage measures are considered because they are indicators of an issuer's financial flexibility and long-term viability, including its ability to navigate and adapt to changes in the economic and business environment. High leverage can drain cash and heighten an issuer's vulnerability to operating and market challenges. Leverage and coverage metrics include (Total Debt + Preferred Stock)/ Gross Assets, Net Debt/ EBITDA, Secured Debt/ Gross Assets, and Fixed Charge Coverage.
Other Considerations: Other considerations include but are not limited to: financial controls and the quality of financial reporting; the quality and experience of management; corporate legal structure; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.
• Aldar Properties PJSC
• Annington Limited
• Arabian Centres Company
• DIFC Investments Ltd.
• Emaar Malls Management LLC
• Emirates Strategic Investments Company
• Fortress REIT Limited
• Global Switch Holdings Ltd
• Growthpoint Properties Limited
• Hammerson Plc
• Land Securities PLC
• O1 Properties Limited
• Peach Property Group AG
• PSP Swiss Property AG
• Redefine Properties Limited
• Ronesans Gayrimenkul Yatirim A.S.
• Swiss Prime Site AG
• The Unite Group Plc
• Tilal Development Co. SAOC
• Tritax Big Box REIT plc
The principal methodology used for these rated entities was Government-Related Issuers Methodology published in February 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Government-Related Issuers Methodology
Assigning a Baseline Credit Assessment (BCA): The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) – its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.
Government uplift: The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance. Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.
GRIs without a BCA: In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating.
• DIFC Investments Ltd.
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on www.moodys.com, for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
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