The Australian CMBS market has successfully refinanced all 2009 year-to-date maturities, totalling A$2.8bn, and has seen a re-opening of the market with the first new issuance of CMBS after a two-year hiatus, according to Fitch. The rating agency notes that the total amount of outstanding Australian CMBS has decreased in size to just A$5.23bn from A$7.79bn, with maturities scheduled during 2010 of A$2.4bn.

David Carroll, director in Fitch's property ratings team in Sydney, says: "Despite a general continuing lack of liquidity in Australian property finance markets, the significant refinancing task identified for CMBS during 2009 appears to have been successfully managed by issuers, with much of the task having fallen to the four major Australian banks. Issuers continue to seek greater funding diversification and are hoping the market's re-opening during 2009 will provide an additional source of liquidity for CMBS refinancing during 2010."

Fitch's report notes that property cashflows generally remain strong, due to high occupancy levels and low tenant defaults. Asset values continue to be negatively impacted by expanding capitalisation rates. However, in most CMBS cases the value of the cross-collateralised asset pools remains higher than the value at origination.

The report covers all CMBS maturities taking place during the remainder of 2009 and in 2010, with a commentary on each. Of particular interest are the two Centro maturities scheduled for December 2009 which, if not refinanced or restructured, would be the first Australian CMBS transactions to pass their scheduled maturity dates without refinancing. If these maturities are not successfully resolved, the resultant asset sales may have a negative impact on asset values.

Commenting on the outlook for 2010, Fitch believes that refinancing risk and property prices will remain significant credit issues.