Moody's: New projects pressure Singapore REITS

Moody's Investors Service said that numerous Singapore Real Estate Investment Trusts have pursued greenfield developments this year.

New developments were announced by Ascendas REIT, which has A3 ratings and a stable view, CapitaCommercial Trust, which has Baa1 ratings and a stable view, CapitaMall Trust, which has A2 ratings and a stable view, K-REIT Asia, which has Baa3 ratings and a stable view, and AIMS AMP Capital Industrial REIT, which has Ba2 ratings and a stable view.

Such projects raise risks in property development and put pressure on key credit metrics during their construction because Singapore REITs take on additional debt before the properties are able to generate income from tenants, the agency said. So, these projects are generally viewed negatively, Moody's said.

Nonetheless, the existing ratings for these companies already factor in a cushion for such developments, the agency added.

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