Ground rent deals 'disguising overall leverage', warns Fitch

摘要

Ratings agency Fitch has warned that ground rent deals in the commercial property market are obscuring real leverage levels. Ground rent deals are particularly common in parts of the market such as hotels. For example, following Queensgate's £lbn acquisition of the Grange hotel portfolio, it completed a ground rent deal with Alpha Real Capital earlier this year. In a report entitled low rates encourage riskier form of UK commercial property finance', Fitch said ground rent deals could "add substantially to traditional loan financing while disguising overall leverage" if the ground rent strip accounts for a significant portion of the income.