TRIS Rating has affirmed the “A+” issuer credit rating of Axtra Future City Freehold and Leasehold Real Estate Investment Trust (SET: AXTRART) with a “Stable” outlook, supported by quality retail assets, predictable rental income and low financial leverage.
The rating also reflects long-term leases with sponsor CP Axtra Public Company Limited (SET: CPAXT), rated “AA-/Stable”, and opportunities for future asset injections. However, intensifying retail property competition, a softer domestic economy and weaker tourist arrivals remain risks to rental growth, occupancy and cash flow.
Resilient occupancy and earnings
As of June 2026, AXTRART was Thailand’s fourth-largest REIT by asset size, with investment properties valued at approximately THB31 billion. Its portfolio comprised 23 Lotus’s hypermarket shopping centers and one Life Xpress retail store, offering about 337,000 square meters of net leasable area nationwide.
Occupancy stood at 96.5% in the first half of 2026, while the lease renewal rate exceeded 90%. EBITDA declined modestly by 1% year-on-year to THB1.1 billion despite heightened competition and weak economic sentiment.
For 2026–2028, TRIS forecasts annual operating revenue of THB2.8–THB2.9 billion, an EBITDA margin of around 79% and occupancy of approximately 96%. Rental adjustments, tenant-mix optimization and cost-efficiency measures, including solar rooftop projects, are expected to support performance.
Low debt provides financial flexibility
AXTRART has maintained a loan-to-total asset value ratio of about 9% and interest-bearing debt to EBITDA below one time over the past several years. Its debt-to-capitalization ratio was approximately 6% as of June 2026.
TRIS expects debt to EBITDA to remain below 1.2 times and the loan-to-total asset value ratio below 11%, supported by manageable investment requirements. Its forecast assumes lease renewal spending of THB50 million in 2026 and THB300 million annually in 2027–2028, alongside annual maintenance and renovation expenditure of approximately THB170 million.
Liquidity remains adequate. At June 30, 2026, the trust held approximately THB1.3 billion in cash and short-term investments, with no debt maturing within the following 12 months. TRIS projects funds from operations of around THB2.1 billion over that period.
Anchor tenant supports income visibility
More than half of AXTRART’s leasable area is secured under long-term leases with Lotus’s hypermarkets under CPAXT, providing a stable revenue base and supporting customer traffic. Fixed-rent contracts represent approximately 75% of leased area.
CPAXT, which held a 25% stake in the trust as of June 2026 and serves as sponsor and property manager, also provides a potential acquisition pipeline through its nationwide network of Lotus’s hypermarkets and Makro stores.
The Stable outlook reflects expectations that operating results and financial metrics will remain consistent with TRIS’s base case. A prolonged increase in adjusted net debt to EBITDA above 3.25 times could trigger negative rating action. An upgrade could be considered if cash generation improves significantly while the trust maintains a strong capital structure.
