The ratings affirmation reflects VIA Outlets’ post-pandemic performance, with the recovery of brand sales reaching pre-pandemic levels in the first six months of 2022. VIA Outlets has achieved this through active management in the remodelling, remerchandising and remarketing (the ‘Three Rs’) of its outlet centers which have led to continued growth and improvement in all key performance indicators in 2023.
VIA Outlets’ 2021 occupancy cost ratio (OCR), excluding periods impacted by pandemic-related closures, was around 10% (12% with turnover rent). This points to its retailers having a higher profit margin, which combined with less-intense personnel costs and higher sales density in outlet stores underlines its sustainable rental levels. The credit rating is supported by continued brand appetite for stores and the strengthening of long-term brand relationships. VIA Outlets’ center expansion plans – including the expansion of Sevilla Fashion Outlet, which is under construction for completion in Q4 2023, as well as its continued focus on digitalisation — provide further growth potential.
Fitch reports that the company’s balance sheet debt is fully-fixed rate and comprises mostly unsecured bonds, with no near-term debt maturities. VIA Outlets maintains a moderate LTV (loan-to-value) and has sufficient funds available for capex and expansion plans, ensuring the company is well positioned to deliver on its growth objectives.