Moody's affirmed Wereldhave NV's long-term issuer and senior unsecured ratings at Baa2 and downgraded its outlook on the Dutch retail real estate investment trust to negative from stable.
The negative outlook is based on Moody's expectation of continued weak operating performance against the backdrop of a challenging retail environment, resulting in subdued like-for-like rental growth and retailer sales expectations.
The rating agency also anticipates further revaluation losses in a difficult investment market that could result in weakening credit metrics. Moody's noted that anticipated impact of bankruptcy-related closure of stores and tenant downsizing, among other factors, could put further pressure on Wereldhave's ability to return to meaningful growth in its shopping center properties.
The long-term issuer rating on Wereldhave takes into account the company's geographically diversified portfolio of mostly convenience-led shopping centers across the Netherlands, France and Belgium. The company's moderate debt-to-gross asset ratio of 40%, a strong fixed charge cover ratio and a fully unencumbered asset base with no secured debt funding also support the rating.
