Moody's affirmed Suntec Real Estate Investment Trust's issuer rating at Baa3, while changing the outlook to negative from stable.
The change in outlook is based on Moody's expectation that Suntec's credit metrics will remain under pressure for at least the coming 12 to 18 months, as it continues to finance its assets under development.
The rating of Baa3 takes into account Suntec REIT's stable and recurring income from its portfolio of high-quality and centrally located assets in Singapore and Australia.
Simultaneously, Moody's said Suntec REIT's ratings are constrained by its partial ownership in its assets, which limits its operational control over the properties and inherent liquidity risks associated with the company's high dividend payout ratios and minimum cash balances.
