OREANDA-NEWS. Fitch Ratings expects business fundamentals for the Peruvian shopping mall sector to remain solid in 2015, overcoming more moderate economic growth. A limited supply of leasable space has resulted in stable operational performance that is expected to continue in 2015 and 2016. Fitch expects operational performance for the Peruvian shopping mall sector to remain stable during 2015, despite more moderate growth expectations for the Peruvian economy. The industry's fundamentals -- stable revenue structure, Peru's demographic and middle-class development and still low industry penetration levels -- are expected to continue driving the sector's stable operational performance.

The sector's occupancy rates remains healthy reflecting an industry that remains underpenetrated. The number of shopping malls in Peru doubled since 2010 due to investments. Nevertheless, the Peruvian mall industry maintains low penetration rates with vacancy in the range of 3%-4% between 2011 and 2014 due to a limited supply of leasable area with only 72 shopping centers in the country. Peru's ratio of only 66,000 GLA per 1,000 people is one of the lowest in South America. As a result, only 13% of Peru's retail sales occur through shopping centers. Occupancy rates remains healthy around 96%.

The industry's cash flow generation is anticipated to remain stable during 2015 due to revenue and lease structures that incorporate fixed and inflation-adjusted components that reduce volatility in revenues and margins. The sector is anticipated to continue growing, but at a more moderate pace compared with prior years, and the main players will continue to primarily focus on organic growth.