SmartCentres Real Estate Investment Trust: Rating Report

On September 21, 2018, DBRS Limited (DBRS) confirmed the Senior Unsecured Debentures rating of SmartCentres Real Estate Investment Trust (SmartCentres or the Trust) at BBB with a Stable trend. The confirmation reflects SmartCentres’ continued growth in its portfolio of value-focused shopping centres, including the acquisition of 12 properties (2.2 million square feet (sf )) from OneREIT in the fourth quarter of 2017 (the OneREIT Transaction) and active development pipeline. The rating is supported by SmartCentres’ roster of high-quality tenants, including Walmart Inc. (Walmart, rated AA with Stable trend by DBRS) and strong market position in the value-focused retail segment nationally. The rating is constrained by concentration risks including asset class, geography and tenant exposure, high leverage (total debt-to-EBITDA ratio on an LTM-basis of 8.9 times (x) as at June 30, 2018) and development execution risks.