International rating agency Scope affirms Summus Capital OÜ’s issuer rating at BB/Stable
The affirmation follows the solid performance of Summus Capital properties, with a high and stable occupancy rate leading to predictable recurring income. Scope has also affirmed Summus Capital BB rating on the senior unsecured debt category. A year ago, Summus Capital became the first Baltic company to receive the Scope rating.
According to Scope’s rating rationale, Summus Capital continued to grow during the 12 months ending June 2022. Scope-adjusted total assets of the company rose to EUR 416m (+16% YoY) and gross lettable area increased by 19%, partially enabled by positive funds from operations and the first tapping of capital markets (EUR 10m bond issued in 2021).
The addition of two properties (Depo DIY property and Damme shopping centre) to its core portfolio of income-generating assets as well as future acquisitions and the planned expansion in current properties will support Summus Capital current standing as the shopping mall operator in the Baltics, Scope reported. Summus Capital geographical foothold is unchanged, with properties across the Baltic countries, but the presence in Latvia has increased (37% of total rental income). Thus, the company partially benefits from different demand patterns.
Summus Capital business risk profile (assessed at BB) continues to be driven by the quality of its commercial real estate portfolio, with assets in Baltic capital cities, which are in European context second-tier investment markets with stable tenant demand. This is evidenced by the portfolio’s high and stable occupancy rate of 97% as of June 2022. The rating remains underpinned by the ‘buy- and-hold’ investment approach, which results in stable rental cash flow. Although over 50% of rental income is derived from retail tenants, Summus Capital properties proved resilient during the Covid-19 pandemic, with no significant impact on rent collections. Scope expects occupancy to remain above 95% based on healthy tenant demand and Summus Capital ability to keep occupancy high.
Profitability, as measured by the Scope-adjusted EBITDA margin, was stable and stood at 64% as at end-June 2022. Scope foresees the EBITDA margin to remain above 60% in the next few years.
For more info please see: https://scoperatings.com/ratings-and-research/rating/EN/172083.
Scope is a privately-held rating agency based in Berlin, with offices in in Frankfurt, London, Madrid, Milan, Oslo and Paris. Scope specialises in the analysis and ratings of financial institutions, corporates, structured finance, project finance and public finance. Scope Ratings is a credit rating agency registered in accordance with the EU rating regulation and operating in the European Union with ECAI status.