The transfer of supermarket chain Mega's branches to other lessees has diversified Blue Square's exposure, Midroog says.
Blue Square Real Estate reports today that Midroog has raised its rating for the company to A2.il with a stable outlook. Among the reasons for the upgrade are the transfer of branches leased to supermarket chain Mega to various parties, chiefly retail company Yeinot Bittan, which took over Mega's leases on identical terms (including a 9% discount which is in dispute), and the occupation of former You branches by various retailers, which improved the diversity of the company's lessees, reducing exposure to any single lessee.
Midroog states that Blue Square Real Estate has high quality assets mostly in in-demand locations, with high occupancy rates over time (about 98% on average), a stable financial profile, high financial flexibility mainly arising from unmortgaged assets worth $2 billion, and substantial liquid reserves appropriate to the company's debt repayment needs. Midroog says that Blue Square Real Estate's rating could rise further if its exposure declines and a settlement with the Mega trustees is completed.
Published by Globes [online], Israel business news - www.globes-online.com - on September 19, 2016
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Mega photo: Einat Levron