Qatar- SP and Moody's assign high ratings to Ezdan

By Satish Kanady

DOHA: Two top global ratings agencies yesterday announced their credit ratings of Qatar’s real estate major Ezdan Holding Group. Standard & Poor’s Ratings Services assigned its ‘BBB-‘ long-term corporate credit rating to Ezdan with Stable Outlook. Moody’s Investors Service assigned a Ba1 Corporate Family Rating (CFR) and Ba1-PD Probability of Default Rating (PDR) to Ezdan. Moody’s outlook on the ratings is also stable.

Ezdan Holding Group Chairman Sheikh Dr Khalid bin Thani bin Abdullah Al Thani (pictured) commented: “ The announcement by international credit ratings agencies are encouraging as we go ahead with our future investment plans. It will help us look for broader horizons”.

S&P said Ezdan’s business risk profile is underpinned by its large portfolio of stable and predictable income-generating assets supported by a diversified portfolio of equity investments that generate sizable dividends. With a gross asset value for investment properties of QR36.9bn ($10.1bn as of Dec. 31 2015 the company’s portfolio is diversified across affordable residential compounds (82 percent of gross asset value) one shopping mall with gross leasable area of 139000 square meters (5 percent) and one large three-star hotel (13 percent) with 3000 rooms and 100 offices.

“We also take into consideration an additional QR3.0 million-QR3.5 million of assets to be delivered in the next two years. We believe the company enjoys good tenant diversity with its largest tenant Qatar Armed Forces accounting for less than 1.5 percent of total revenues.” S&P noted. Ezdan’s assets which ranks among the top-five countries in the world in terms of GDP per capita. About 80 percent of the total population comprises expatriates and we expect the proportion to continue growing at a steady pace and support demand for housing in the next few years. Moreover the expatriate population is restricted from owning property in the country except in freehold developments which are very few. This constitutes a favorable barrier to entry for established residential landlords such as Ezdan.

Ezdan is a market leader in the Qatari real estate sector. In 2012 Ezdan bought a portfolio of equity investments from its holding company and since then has been investing in diverse businesses that are key to Qatar’s economy. While we expect the real estate portfolio to grow by 20 percent-25 percent (asset growth) in the next three years such that it accounts for more than 75% of assets we also believe that diversified investments will remain an important business strategy.

“The assignment of Ba1 ratings reflect Ezdan’s leadership in its local residential market in Qatar with a sizeable investment properties portfolio of QAR36.9 billion as of end-December 2015” says Julien Haddad Analyst at Moody’s.

“The Ba1 ratings also take into account Ezdan’s sizeable equity portfolio which provides an additional source of recurring income through dividends and liquidity for the company given that the majority of the portfolio is comprised of listed stocks”.

The Peninsula