Moody's: Singaporean CMBS transactions enjoy good performance

Moody's revealed that cash flow from properties backing Singaporean Commercail Mortgage Backed Securitization has been strong. This has been an ongoing trend throughout 2010.

 

According to its new quarterly report -- which covers 4Q2010 and is entitled "Singaporean CMBS 4Q2010 Performance Review" -- actual debt service coverage ratios were 3x, while appraisers' loan-to-value ratios were in the 20-32% range.

"For the office building in the CMBS transaction, both vacancy and rents were in line with Moody's stabilized assumptions," says Marie Lam, a Moody's VP/Senior Credit Officer and author of the report.

"For shopping malls, the majority of the securitized retail space portfolio generated rents above our assumptions. Vacancy rates were lower than our stabilized assumptions," adds Lam.

"The retail industry has benefited from a robust economy and a strong tourism industry."

In addition, rents in securitized industrial buildings tracked closely with Moody's stabilized assumptions, although vacancy rates for some buildings have not improved after leases matured in 2010.

Overall, the commercial real estate sector in CMBS transactions has benefited from the strength of Singapore's economy, which recorded 14.7 per cent GDP growth in 2010, making it one of the world's fastest growing economies.