Fitch Publishes REIT Report Quarterly for 4Q'15
On Dec. 8, 2015, Fitch stated that better portfolio strategies and management, lower risk external growth strategies and generally more conservative financial policies have enhanced credit profiles and will lead to a continuing positive sector outlook for U.S. Equity REITs in 2016. The stable rating outlook for the sector for 2016 reflects expectations of good property-level fundamentals across nearly all asset classes and relatively unchanged leverage profiles.
On Dec. 8, 2015, Fitch stated that sectorwide liquidity coverage showed improvement for U.S. equity REITs. The median liquidity coverage ratio for select U.S. equity REITs is 1.6x for the Oct. 1, 2015-Dec. 31, 2017 period, compared with 1.4x for the same period last year. Coverage for four of the five major property types improved from the prior comparable timeframe, with retail being the lone exception. Despite these positive elements, the public unsecured bond market has become choppier in recent months, and REITs have responded with a heavier reliance on revolving lines of credit.
On Dec. 7, 2015, Fitch stated that persistent discounted equity valuations for most companies have prompted REITs to favor property dispositions over share issuance in their investment funding strategies. Fitch expects asset sales to remain a hot topic for the foreseeable future given the arbitrage between private and public market real estate values. The recent 11% net asset value (NAV) discount for public REIT shares has revived the popular slogan that real estate is cheaper on Wall Street than Main Street.
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
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