S&P lowers Starhill view to negative

S&P said it revised the outlook on Starhill Global Real Estate Investment Trust to negative from stable.

The agency also said it affirmed the BBB+ issuer credit rating on Starhill, along with the BBB+ issue rating on its guaranteed senior unsecured notes.

The agency said it expects the trust's leverage ratio to deteriorate to less than the downgrade trigger because of an asset-enhancement initiative concerning its Starhill Gallery in Malaysia.

The ratings were affirmed for now because S&P said it anticipates secured occupancy and higher rents on lease renewal following the asset-enhancement initiative completion in 2021, leading the leverage ratios to recover by 2023.

Over the longer term, the asset initiative should enhance the REIT's asset quality and contribute more resilient recurring income, the agency noted.

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