Fitch Ratings has assigned Yuexiu REIT Asset Management a long-term issuer default rating (IDR) of 'BBB-' with a stable outlook.
The agency has also assigned a foreign-currency senior unsecured rating of 'BBB-'.
The REIT’s IDR is supported by its investment property asset quality, with office and retail space in prime locations, said Fitch.
Yuexiu REIT’s assets are in the core business districts of Guangzhou, Shanghai, Wuhan and Hangzhou.
Fitch expects moderate growth in the REIT’s average rental rate in the next few years.
According to Fitch, Yuexiu REIT has achieved growth in its average rental rate, with the exception of COVID-19-weakened 2020, and rates have recovered in 2021.
“The trust has shown stable performance over the cycle, with year-end occupancy rates for office and retail assets averaging around 92% in 2016-2020”, said Fitch.
“Occupancy rates for mature assets have consistently been above 95%”, the agency added.
Fitch Ratings’ full report on the REIT can be viewed here.
Yuexiu REIT was last done on the HKEX at HKD3.67, which presently implies a distribution yield of 5.98% according to data on the Hong Kong REITs table.