IFC Development Limited

Overview Key strengths Key risks Excellent asset quality with some asset mix diversification despite being a single complex. Prolonged social distancing policies and border closures continue to affect retail and hotel business. Limited capital expenditure (capex) and minimal development risk. Headwinds from the pandemic will weaken leverage and consume rating buffer. Support from shareholders due to IFC's strategic importance. We expect IFC to maintain a credit profile commensurate with an 'A' rating. However, its remaining rating buffer will likely be consumed by the delayed recovery of its retail and hotel business. This is because of the fifth wave of the COVID-19 outbreak in Hong Kong and the associated extension in social distancing measures and border closure. We forecast a 0%-5%

...IFC Development Limited's (IFC) leverage will further weaken due to the prolonged impact of the pandemic on retail and hotel business. We expect IFC to maintain a credit profile commensurate with an 'A' rating. However, its remaining rating buffer will likely be consumed by the delayed recovery of its retail and hotel business. This is because of the fifth wave of the COVID-19 outbreak in Hong Kong and the associated extension in social distancing measures and border closure. We forecast a 0%-5% drop in revenue in the fiscal year ending June 30, 2022, mainly driven by a 12%-17% decline in retail rental income. This is partially offset by resilient office segment performance where negative rental reversion is more moderate. Revenue for the 2023 fiscal year should stabilize with support from the office segment, low base retail segment and the gradual recovery of its...

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