Fitch Ratings affirmed the long-term issuer default rating of Indonesian property developer PT Modernland Realty Tbk at B, with a stable outlook.

The rating agency said Aug. 7 that the company's rating is driven by various factors, including Fitch's expectation that Modernland will continue to generate at least 2 trillion to 2.5 trillion rupiah of presales annually over the medium-term despite volatile property demand.

The rating agency also estimates that the property developer's cash flow from operations will turn positive by the end of 2019, after turning negative in 2018.

Modernland's rating is constrained by its still-limited scale in residential sales, for which there is more stable demand across economic cycles than industrial land, Fitch added. The rating agency said that there are longer-term risks to Modernland's residential sales because it only has land for another six years of sales at Jakarta Garden City, one of its key projects.

Fitch said it believes that risk is mitigated by Modernland's large, low-cost land bank for expansions in Bekasi and Cilejit, which should should improve the company's residential project diversification over the medium term, and maintain stable profit margins.

As of Aug. 7, US$1 was equivalent to 14,230.00 Indonesian rupiah.