Credit rating agency Korea Ratings has upgraded South Korea’s largest real estate asset manager IGIS Asset Management’s long-term commercial paper (CP) rating from BB.B+ to A- and its short-term rating from A3+ to A2- respectively.
Korea Ratings’ upgrade on June 18 reflects the assessment that IGIS is maintaining a stable business outlook supported by a highly competitive edge in the real estate investment sector. Its average return on assets (ROA) over the past three years is high at 18.5% and its capital adequacy ratio has improved following the recent rights issues, it said.
“IGIS Asset Management’s high reputation and credibility have helped them become South Korea’s leading real estate asset manager for both blind-pool and public equity funds invested in by major institutional investors,” Sunjoo Kim, a researcher at Korea Ratings, said. “Though it is exposed to intensifying competition in the asset management industry, IGIS is maintaining outstanding profitability by continuously increasing its size of managing assets.”
In November last year, another credit rating agency Korea Investors Service also upgraded IGIS’ CP rating to the same level as Korea Ratings’.
As of March this year, the real estate-related assets IGIS are managing have more than quadrupled to 14 trillion won ($11.5 billion) from 3 trillion won at the end of 2014. During the same period, its market share in the real estate financing sector stood at 13.3%, the largest in the industry since 2016. Meanwhile, the debt-to-equity ratio was lowered to 59.7% as of the end of March this year thanks to two rights offerings, compared to 146.7% at the end of 2018.
IGIS is currently the largest integrated real estate investment and asset management firm in South Korea with growth assets under management of $27.7 billion as of 2019. (Reporting by Jinwon Lee)