S&P Global Ratings revised its outlook on German real estate company Alstria Office REIT-AG to positive from stable, and affirmed its issuer credit rating at BBB.
The rating agency attributed the outlook revision to lower debt leverage of the office real estate investment trust and to its expectation that the significant improvement seen in the REIT's credit metrics over the last 12 months may continue over the next two to three years.
The credit metrics of Alstria improved more than what the rating agency projected in the first half after further asset sales and revaluation gains.
Ratings said it believes the favorable market in Germany will continue to benefit Alstria's office portfolio, adding that it expects the REIT's cash flow generation to stay stable and the rental growth of existing lease agreements and better occupancy levels to fully offset any negative rental impact from asset sales.
The positive outlook takes into account the agency's view that the REIT's S&P Global Ratings-adjusted ratio of debt to debt-plus-equity may not rise back to 35% or above and that EBITDA interest coverage will stay well above 4.0x within the next two years.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.
