Rating Release
Agusto & Co. upgrades the rating assigned to Smart Residences Limited to “Bbb+” long-term and “A2” short-term, with a stable outlook.
The rating expires on 30 June 2026.
Agusto & Co. hereby upgrades the rating of Smart Residences Limited (“SRL” or “the Company”) to “Bbb+” long-term and “A2” short-term. The upgrade reflects the favourable demand fundamentals within Nigeria’s short-let segment, supported by a rising culture of experiential travel, increased corporate and religious conferences, and guests placing greater value on privacy, comfort and convenience. The ratings further capture SRL’s good profitability metrics, driven by the ability to adjust prices when necessary, improving occupancy levels and ongoing cost-containment efforts. The ratings also take into account the Company’s healthy operating cash flow, underpinned by its predominantly cash-and-carry revenue model, and an adequate working capital position. The ratings however remain constrained by SRL’s rising leverage, reflecting the Company’s ongoing expansion phase, execution risks tied to potential delays in completing current projects, which could weigh on our revenue outlook, and the concentration of all its properties in Abuja, exposing the business to location-specific shocks.
Smart Residences Limited (SRL) is a luxury short-let apartment and hotel operator in Abuja, Nigeria, incorporated on 8 May 2019 as Smart Lodges Limited and rebranded to Smart Residences Limited in 2020. SRL currently manages a portfolio of 247 units under five distinct brands – The Residence, The Glass Residence, The Destination, Homeway and GetAway, and has hosted over 19,000 guests. SRL operates a flexible business model, partnering with local developers, landlords and realtors to acquire leases in high-demand locations. Properties are upgraded and remodelled into upscale short-term rental apartments, supported by technology-enabled operations, including mobile check-in, contactless payments and advanced air filtration systems in the homes.