International rating agency Scope assigns first-time issuer rating of BB/Stable to Summus Capital OÜ
TALLINN, Sep 07, BNS – The real estate investment holding group Summus Capital plans to expand its real estate portfolio and is about to invest approximately 150 million euros by 2023, Boris Skvortsov, chairman of the supervisory board of the group, said on Tuesday.
International rating agency Scope has assigned a first-time issuer rating of BB/Stable to Summus Capital OU.
“With our successful debut bond issue in June, we’ve made the necessary preparations to make additional investments in properties and developments throughout the Baltics,” Skvortsov said in a press release.
Hannes Pihl, member of the company’s management board, believes that the rating helps also with identifying and closing new deals for Summus Capital in the future.
The rating agency assessed that Summus’ business risk profile, assessed at BB, is driven by its commercial real estate portfolio exposure to second-tier investment markets with stable tenant demand, as evidenced by a high and stable occupancy rate of above 98 percent in the last four years, and 96 percent as at June 2021.
The rating by Scope is underpinned by Summus’ “buy-and-hold” investment approach, which results in stable rental cash flow generation, and fairly well diversified portfolio across the Baltic region. Although over 50 percent of its rental income is derived from retail tenants, Summus’ properties proved resilient during the COVID-19 pandemic, with no significate impact on rent.
The rating was mainly constrained by the company’s small size and market shares, with Scope-adjusted total assets of around 350 million euros as of June 2021
The agency highlighted the company’s fairly well diversified portfolio across the Baltic region of Lithuania, which accounts for 47 percent of gross asset value, Latvia, 28 percent, and Estonia, 25 percent.
According to the rating report, profitability, as measured by the Scope-adjusted EBITDA margin, has also remained stable and above 60 percent in the last few years. Scope expects Summus’ occupancy to remain at above 95 percent based on healthy demand in the tenant market demonstrated by the company’s ability to maintain high occupancy in its buildings.
Scope is a privately-held rating agency based in Berlin, with offices in in Frankfurt, London, Madrid, Milan, Oslo and Paris. Scope specializes 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.
Summus Capital OU is a real estate investment holding established in 2013 that holds 11 properties in all three Baltic countries. Summus Capital started its operations and is headquartered in Estonia, where it holds the Veerenni 1 and Veerenni 2 medical centers, de la Gardie and Auriga shopping centers, Punane 56 multifunctional business complex and a portfolio of warehouse properties. In Latvia, Summus Capital holds Riga Plaza shopping center, and in Lithuania, BOD Group High Technology Center, Nordika shopping center and Park Town 1 and 2 office buildings.
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