S&P Global Ratings affirmed its BBB/A-2 rating on French real estate investment trust Covivio and revised its outlook to positive from stable.

The rating agency said the revised outlook reflects the possibility of a ratings upgrade if the company "durably maintains credit measures commensurate with a BBB+ rating."

Covivio, formerly known as Foncière des Régions, has limited expose to development risk and a strong business risk profile, S&P noted. Development activities are limited to renovation or extension work at existing properties, reflecting less than 6% of total market value, and have adequate preleasing levels.

The rating agency also noted Covivio's discussions for a full business combination with Beni Stabili SpA SIIQ, its 52.4%-owned office REIT subsidiary with assets in Milan. The merger is expected to close by year-end.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.