The firm has lowered its long-term corporate credit ratings on Goodman Group from BBB+ to BBB, Mirvac Group from BBB to BBB- and revised the rating outlook on GPT Group from stable to negative.
"Ongoing refinancing pressures and sticky debt levels have contributed to our more negative view of the AREIT sector, which is reflected in the recent negative rating actions taken," S&P said.
The current real estate downturn was unique in that both the tenants and the debt financiers were under stress, it said.
The research firm found there is now reluctance by bankers to grant AREITs additional flexibility in their credit facilities. Bankers are also limiting their exposure to single AREIT names.
If the difficult capital market conditions remained, it could result in further downgrades, S&P credit analyst Craig Parker said.
"If we find that 2010 is likely to continue to remain weak, with non-real estate-related extraneous factors continuing to drag the sector down, we expect that some of the investment-grade ratings in the portfolio may continue down the credit curve," Parker said.
