Bangkok--18 Nov--Moody's
Moody's Investors Service says in a new quarterly report that cash flow from properties backing Singaporean CMBS has been strong, an ongoing trend thus far in 2010.
Accordingly, there are no rating implications on outstanding transactions.
According to the report -- which covers 3Q2010 and is entitled "Singaporean CMBS 3Q2010 Performance Review" -- actual debt service coverage ratios were 3x, while appraisers' loan-to-value ratios were in the 16-34% range.
"For the office buildings in these transactions, performance has improved gradually, benefited from the improving Singaporean economy," says Marie Lam, a Moody's VP/Senior Credit Officer and author of the report.
"Vacancy rates, for example, continued to decline in 3Q, ranging from 5.5% to 10%, an improvement from the over-10% that prevailed in 2009.
"Rental rates, however, saw a slight drop during the quarter, possibly because of new leases."
"For securitized (non-suburban) shopping malls, rental rates softened slightly in 3Q, as the abundant supply of retail space resulted in a more competitive environment," adds Lam.
"Still, vacancy rates have stayed very low, as the malls have benefited from an improvement in retail sales and a revival in tourism."
"Meanwhile, the suburban shopping malls have maintained their robust performance, with strong rental and low vacancy rates."
In addition, rental rates for securitized industrial buildings tracked closely with Moody's stabilized assumptions, although vacancy rates for some have increased over the last few months.
Overall, the commercial real estate sectors in CMBS transactions have benefited from the improving Singapore economy, which recorded 10.3% GDP growth in 3Q2010 from a year ago and an unemployment rate of 2.1% in September.
The report, which is one of Moody's ongoing efforts to provide more information and transparency to the Singapore CMBS market, is now available at www.moodys.com.
In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck.