The fund, managed by Australian Unity Property, is a property fund investing in direct property assets, unlisted property funds and listed property securities.
Income risk was substantially lowered through increased portfolio occupancy, a meaningful extension in the weighted average lease expiry and attractive lease terms, S&P said.
"The most significant risk we see is the limited flexibility to effect asset allocation changes and shift the portfolio toward the neutral asset allocation. The fund has experienced net outflows over the past year and moved further from neutral. There are some upcoming liquidity events, but we believe that the managing of fund flows and portfolio rebalancing are likely to remain competing objectives requiring careful management," it said.
"Despite the identified risks, we are comfortable that the quality of the underlying investments, the quality of the team, competitive fees, and the simple investment structure mean the fund is well placed to meet its objectives."
