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Brazilian property company's credit rating upgraded

Date added: 26th July, 2011 at 10:21
(view all articles from July, 2011)

Brazilian property company BR Properties has had its credit rating upgraded by Fitch on strong demand for real estate, good risk management and improved cash flow.

The firm's rating has been bumped from B+ to BB- with the awarding body noting that the enterprise's portfolio of quality assets has been bettered.

Commercial property in Rio de Janeiro and Sao Paulo has low vacancy rates and is experiencing strong demand, Fitch said, explaining that BR Properties' focus on these markets has been factored into its credit rating improvement.

Indeed, the firm reported a financial vacancy rate of 6.2 per cent in the first quarter of 2011 and this is expected to fall.

Furthermore, the agency highlighted that the real estate company's debt levels are consistently lower than 50 per cent of the value of the assets it owns.

Investment in Brazil by BR Properties to the tune of around 3.6 billion reais (£1.4 billion) between 2007 and 2010 and the heavy acquisition of buildings is expected by Fitch to boost cash flow and reduce risk to the firm.

Brazilian property developer Rossi Residencial is also performing well, reporting a 20 per cent increase in contracted sales between the first half of 2010 and 2011.

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