Majid Al Futtaim Holding, the Dubai-based operator of malls and hotels, has maintained strong financial metrics despite operating in some challenging markets, Fitch Ratings has said in a new report.
The rating agency has affirmed MAF’s long-term issuer default rating (IDR) and senior unsecured rating at ‘BBB’, with a stable outlook.
It said the company’s operational performance had proved “resilient”, with occupancy rates at its malls above its European peers.
“MAF’s maintained strong financial metrics in FY10 and FY11, due to its active asset management, despite the challenging property environment in the UAE and exposure to Bahrain and Egypt,” said Bashar Al Natoor, director in Fitch’s Corporates team in Dubai.
“Operational performance was resilient, with the occupancy rate remaining at 98.6 percent as MAFP benefits from an average lease length of 7.7 years, which compares well with European peers, a quality and diversified tenant base exhibiting an estimated 95 percent lease renewal rate, and a low tenant default rate below 1 percent,” Al Natoor added.
He said the ratings continue to reflect MAF’s status – through the property arm of the group, Majid Al Futtaim Group Properties (MAFP) – as one of the largest property investment companies in the Middle East and North Africa region (MENA).
The consolidated group has a total retail area of 943,471 sq m and MAFP had net fixed assets valued at AED29bn as at the end of 2011.
MAFP’s centres are prime sites due to their strategic locations in major cities, up-to-date leisure and entertainment facilities and the availability of large parking lots, Fitch added.
MAF said in January full-year earnings increased 18 percent on growth in its home market of Dubai.
Revenue rose 10 percent to AED18.7bn ($5.1bn), the closely-held company said in a statement. Earnings before interest, taxes depreciation and amortization, advanced 18 percent to more than AED2.7bn, the company said.
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