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Moody’s Upgrades GELF’s Scores To Baa1; Steady Outlook

London, 08 October 2015– Moodys Investors Service has actually today upgraded Goodman European Logistics
Fund, FCP-FIS (GELF) long-term
backed issuer rating to Baa1 from Baa2. Simultaneously, the
backed senior unsecured rating of GELF Bond Issuer I SA
was upgraded to Baa1 from Baa2 including the provisional backed long-lasting
score of its EUR5.0 billion guaranteed medium-term notes
programme which was updated to (P)Baa1 from (P)Baa2. The outlook
on all scores is steady.


The upgrade of GELFs score to Baa1 shows the funds continuing strong
operating performance, improved credit metrics and steady to enhancing
outlook for the logistics property sector, stated Roberto Pozzi,.
Moodys Vice President and lead expert on the fund. In addition,.
GELF has actually significantly enhanced the ratio of its unencumbered possessions.
to total possessions to 99 %, includes Mr. Pozzi.

The Baa1 rating mostly shows GELFs strong brand and the franchise.
value brought to the fund by its external manager and cornerstone unit-holder,.
Goodman Group (Baa2 stable), a noted Australian industrial real.
estate investment trust (REIT). Other essential strengths underpinning.
the rating are (i) GELFs top quality profile of modern-day prime.
logistics homes, which have constantly high tenancy rates.
(97.9 % at H1 2015) and broad geographical diversification,.
supplying the fund with steady positive cash flow from operations;.
(ii) a lower business threat profile than similarly ranked peers, as.
the funds development activity represents only a little percentage of.
its possessions; (GELF has a right of very first refusal to acquire properties.
established by Goodman in continental Europe and therefore has access to.
brand-new, contemporary homes without the development danger) and (iii) moderate.
take advantage of.

We anticipate that adjusted financial obligation to total possessions (reliable leverage).
will continue to be in between 35 % -40 % over the next 12-18.
months, which is at the lower end of the funds 35 % -45 %.
long term target variety (37 % at the end of June 2015). Also,.
we expect the funds taken care of charge protection will exceed 5.0 x (5.7 x.
as of end June 2015) over the very same duration. Given increasing tenant.
demand and a minimum of steady investor demand, we do not expect major.
disadvantage risks to logistics home values near term. In addition,.
99 % of the funds possessions are unencumbered, which offers.
a potential source of alternative liquidity in case of need.

These staminas are partially countered by GELFs smaller sized scale, as determined.
by gross assets, and concentration in its renter base. While.
the fund is little relative to its European peers, it remains in growth.
mode with a considerable amount of committed equity still to be drawn from.
unit-holders as of 30 June 2015. The fund also has a moderately.
high direct exposure to income concentration risk with the leading 10 tenants accounting.
for roughly 45 % of profits at H1 2015; this is being.
knowingly managed down as the fund grows (48 %: H1 2013).
Although the sector remains cyclical, we anticipate that leas for distribution.
warehousing will continue to increase over the next 12-18 months.
reflecting a moderate, though still vulnerable, financial recovery.
in Europe.

We think about GELFs liquidity to be solid. Forecast cash flow generation,.
money resources and dedicated however uncalled equity amply cover prepared for.
money outflows. Besides small quarterly payments amortising a.
financing lease, GELFs earliest debt maturity falls in April 2018.
Satisfactory headroom under GELFs unsecured bank financial covenants,.
which are leverage and debt service cover adds to liquidity stamina.

In addition, GELF deals with a liquidity evaluation in 2016, when.
device holders wanting to withdraw their equity stake might doing this.
The rating presumes that the liquidity evaluation will result in no disruption.
to the company, nor will it adversely affect the funds financial.
stamina. This view reflects (1) proven unit holder assistance,.
as provened by GELFs several equity raises since the funds creation.
in 2006; (2) the truththat Goodman Group already provides restricted.
however continuous liquidity to other unit holders on a quarterly basis;.
(3) the groups maintenance of strong business governance concepts.
that are planned to align its interests with those of the system holders;.
and (4) that GELFs status as a regulated entity restricts its capability.
to incur take advantage of above defined levels.


The steady outlook reflects Moodys expectation that GELFs leverage,.
as measured by total debt/gross possessions (as changed by Moodys),.
will remain in the variety of 35 % -40 % (37 % per.
end June 2015) and its set charge above 4x (5.7 x) over the next.
2 years. The stable outlook likewise assumes that the fund will continue.
to increase its scale and tenant diversity. It also presumes.
that GELF will maintain the portion of unencumbered possessions to total.
possessions above 85 % (99 %), that the fund will maintain.
an adequate liquidity profile and that the financial covenants in its.
financial obligation arrangements will remain to safeguard unsecured loan providers successfully.
from the liquidity review in 2016.


Upward pressure on the rating or outlook might occur if GELF establishes.
higher occupant diversification in time with the ten largest occupants.
consistently adding to less than 25 % of rental income compared.
to 45 % as of June 2015, in combination with keeping (i).
leverage, as determined by overall debt/gross assets (as changed by.
Moodys), sustainably below 35 %; (ii) fixed charge protection.
above 4.5 x, and (iii) unencumbered assets/total assets patterns.
above 85 %; whilst maintaining a strong liquidity position.
and protecting its policy to mainly acquire finished investments rather.
than develop them. All the above expectations will require to be satisfied.
for an upgrade to be thought about.

On the other hand, downward pressure on the rating could occur if i) GELFs.
business risk profile deteriorates as an outcome of an increased concentration.
of renter earnings or a bigger advancement program on a continual basis;.
ii) its financial covenants stop to protect unsecured lenders effectively.
from liquidity evaluations or liquidity deteriorates otherwise; or iii) the.
funds financial metrics deteriorate such that its set charge coverage.
ratio falls below 3.5 x or reliable take advantage of increases materially above.
40 %.


The principal method made use of in these scores was International Rating Methodology.
for REITs and Other Office Building Firms released in July 2010.
Kindly see the Credit Policy page on for.
a copy of this method.

Goodman European Logistics Fund (GELF or the fund) is one.
of the leading European logistics genuineproperty funds with a pan-European.
portfolio of contemporary, prime logistics possessions, the bulk of which.
are located in core Western European nations Belgium, France,.
Germany and The Netherlands. Pro-forma for recent divestments,.
GELFs portfolio consists of 95 facilities and total possessions of EUR2.2.
billion since 30 June 2015. The Fund is an unlisted genuine estate.
financial investmentmutual fund registered in Luxembourg as a fonds commun de positioning.
and has 33 investors, with the Goodman Group (Baa2 stable) holding.
a 20.4 % stake.


For scores provided on a program, series or category/class of financial obligation,.
this statement offers certain regulative disclosures in relation.
to each score of a consequently issued bond or note of the exact same series.
or category/class of debt or pursuant to a program for which the scores.
are obtained exclusively from existing ratings in accordance with Moodys.
score practices. For ratings provided on a support service provider,.
this statement provides specific regulatory disclosures in relation.
to the score action on the assistance supplier and in relation to each certain.
score action for securities that obtain their credit ratings from the.
support companies credit rating. For provisionary scores,.
this statement supplies particular regulatory disclosures in relation.
to the provisionary rating designated, and in relation to a conclusive.
rating that may be appointed subsequent to the last issuance of the debt,.
in each case where the transaction structure and terms have actually not changed.
prior to the task of the conclusive score in a way that would.
have actually affected the score. For additional details please see the.
scores tab on the issuer/entity page for the respective issuer on

For any affected securities or rated entities receiving direct credit.
support from the main entity(ies) of this score action, and.
whose ratings may alter as an outcome of this score action, the.
associated governing disclosures will be those of the guarantor entity.
Exceptions to this technique exist for the following disclosures,.
if appropriate to jurisdiction: Ancillary Services, Disclosure.
to ranked entity, Disclosure from ranked entity.

Governing disclosures included in this news release apply to the credit.
score and, if applicable, the associated rating outlook or rating.

Please see for any updates on changes to.
the lead rating expert and to the Moodys legal entity that has actually provided.
the score.

Please see the ratings tab on the issuer/entity page on
for additional governing disclosures for each credit score.

Roberto Pozzi
VP – Elder Credit Officer
Corporate Financing Group
Moodys Investors Service Ltd.
. One Canada Square
Canary Wharf
London E14 5FA
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44 20 7772 5454 Moodys upgrades GELFs ratings to
Baa1; steady outlook

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