Research Update: AMP Capital Shopping Centre Fund Outlook Revised To Negative On Unitholder Redemptions; 'A' Rating Affirmed

AMP Capital Shopping Centre Fund (ASCF) received unitholder redemptions of about A$612 million during its five-yearly liquidity window. The Australia-based REIT is required to fulfil these unitholder redemptions over the next 24 months on or before November 2024. We expect ASCF to fund the unitholder redemptions primarily by divesting portfolio assets, which is likely to reduce the fund's overall scale, size, and asset diversity. That said, we expect the fund to operate within its target gearing range (total drawn debt to gross assets) of 15%-25%. On March 15, 2023, we revised the rating outlook on ASCF to negative from stable. At the same time, we affirmed our 'A' issuer credit rating on the real estate fund. The negative outlook reflects

...- AMP Capital Shopping Centre Fund (ASCF) received unitholder redemptions of about A$612 million during its five-yearly liquidity window. The Australia-based REIT is required to fulfil these unitholder redemptions over the next 24 months on or before November 2024. - We expect ASCF to fund the unitholder redemptions primarily by divesting portfolio assets, which is likely to reduce the fund's overall scale, size, and asset diversity. That said, we expect the fund to operate within its target gearing range (total drawn debt to gross assets) of 15%-25%. - On March 15, 2023, we revised the rating outlook on ASCF to negative from stable. At the same time, we affirmed our 'A' issuer credit rating on the real estate fund. - The negative outlook reflects our view that unitholder redemptions will constrain the rating on ASCF over the next 24 months. In particular, the fund will likely undertake material asset divestments to fulfil these redemptions. We expect the fund's scale of operations and...

Research Update