High-Grade Commercial Properties boost Credit Profiles of Realty Firms
The credit profile is further supported by the low cost of debt funding available for these high-quality realty assets. This is reflected in the reducing spreads for loans to these assets by 75-100 basis points over the bank benchmark rates. Such a milieu would continue to draw investors to this realty segment over the medium term, especially private equity funds and property managers.
Apart from better management of assets, these players bring in improved financial discipline with structured escrow accounts and reduced cash-flow leakages, Crisil added. These specific characteristics include tenant mix and vacancy risk as well as a deep dive into the quality of management of the property developer or manager. The application of revised criteria on Crisil’s operational commercial real estate portfolio will result in a positive bias on the credit rating of some of these assets, it added.
Civil Engineering & Construction Review is a leading monthly news journal, launched in 1988, at New Delhi, India by Trend-Set Engineers Pvt. Ltd. Its dedication to reader satisfaction and also towards fulfilling the ever - growing needs of the construction profession, makes CE&CR the first choice of all those connected with the construction industry.