LPT moves may affect ratings

Consolidations and moves offshore may affect the future ratings of Australian property trusts but the outlook for the sector is fairly stable, according to Moody's Investors Service. The ratings agency said recent events were creating more risk for the LPT sector and “clouding its traditional stability” so it's important for managers to focus on maintaining predicable cashflows. Moody's said fundamentals are still solid in retail but the office area is disappointing with patchy demand from tenants. The Melbourne office market will find the next one or two years “particularly challenging”. The report comes as Westfield is set to fold its various trusts into one and Lend Lease is looking to merge with General Property Trust.