For the first time in the Baltics, the international credit rating agency Scope assigns an issuer rating to one of the leading commercial property investment companies in the Baltics Summus Capital Summus Capital is the first Baltic commercial property investment company to be assigned a Scope credit rating. This valuation reflects the Summus property portfolio, which includes properties with high and stable occupancy and an appropriate weighted average residual lease term (WAULT) in the portfolio, as a result of which it is possible to receive predictable income on a regular basis. In turn, the small size of the company and the concentrated portfolio are the main limiting factors. Scope is a European credit rating agency that has recently expanded and launched in the Baltics to offer local companies new opportunities to access capital markets.
Scope is an international credit rating agency that eliminates risks and prepares an independent assessment by providing investors with reliable information on the credit quality of the state, bank or company.
The Scope assessment states that Supreme Capital’s business risk profile is affected by the exposure of its commercial real estate portfolio to second-tier investment markets with stable tenant demand, as evidenced by the 98% stable and high occupancy rate over the last four years (96% in June 2021). The credit rating is affected Supreme A buy-and-hold approach to investment, which has led to stable rental income. Although more than 50% of rental income is provided by retail tenants, Supreme properties during Covid-19 have proven to be sustainable and leasing activities have not been significantly affected.
Scope positively assessed as well Supreme diversified portfolio of the company, which operates in the entire Baltic region – in Lithuania 47% of the value of gross assets, in Latvia 28% and in Estonia – 25%. According to the Scope report Supreme profitability has been stable over the last five years (measured by scope-adjusted EBITDA margin). Based on the high demand in the tenant market, Scope provides that Supreme the occupancy rate will exceed 95%, as evidenced by the company’s ability to maintain a high occupancy rate in its buildings.
Boris Skvortsov, summus capital Chairman of the Board, points out that the company plans to invest about 150 million euros in the expansion of the company by 2023: “Thanks to the successful bond issue in June, we have completed the necessary preparations to invest in properties and their development throughout the Baltic region,” explains Skvorcovs. summus capital The team believes that the credit rating shows that the company has become a more institutionalized, transparent and successful partner for financiers, investors and tenants. Hannes Pill, Member of the Board (Hannes Pihl) is convinced that a credit rating will also help summus capital identify and conclude new transactions in the future.
Scope is a private credit rating agency headquartered in Berlin with branches in Frankfurt, London, Madrid, Milan, Oslo and Paris. Scope aims to support capital market participants from the Baltic States by giving them access to international capital. Scope specializes in the analysis and credit rating of financial institutions, companies, structured finance, project finance and public finance. Scope Ratings is a credit rating agency registered under the EU credit rating framework and operating in the European Union with ECAI status. Despite the small size of the Baltic market, Scope aims to offer cooperation to any European country that wants to expand its capital market. In addition to providing customized financial services, Scope prepares credit ratings, ESG (environmental, social and governance) analyzes and fund analyzes. Between Scope’s customers include the British bank Barclays, the German international car corporation Daimler, the largest German airline Deutsche Lufthansa, the German science and technology company Merck KGaA, the French international pharmaceutical company Sanofi and the international banking group Unicredit.
Through summus capital
Summus Capital OÜ is a real estate investment company founded in 2013, which owns 11 real estate objects in all three Baltic countries. Summus Capital has a diversified cash-generating commercial property portfolio of EUR 300 million in the retail, office, logistics and medical segments. Summus Capital has a long-term investment horizon and a strong tenant base, with a total number of tenants exceeding 300. At the end of last year, the company acquired the Rīga Plaza shopping center and plans to expand its presence in Latvia by acquiring new investment objects.