Credit rating agency Moody’s has become more negative about retail property company Wereldhave and gives the fund a junk status. The credit rating for the company has been downgraded from Baa3 to Ba2 in two steps and the expectation has been set to negative.
Moody’s cites the corona crisis as the reason for the adjustment. Shopkeepers are hard hit by measures to control the spread of the virus, so shopkeepers feel the same. Before the corona virus hit Europe, Wereldhave was already experiencing declining growth in rental income, the number of visitors to its shopping centers and the turnover generated there.
Moody’s expects that trend to accelerate due to the crisis. Although governments have pledged support to retailers, Wereldhave is also expected to make concessions ranging from longer payment terms to rent reductions. Vacant buildings will be more difficult to fill.
“Great uncertainty surrounding the shopping environment and further risks to operational performance are contributing to the negative outlook for the rating,” said Moody’s.