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Rating action

Scope Ratings GmbH (Scope) has today assigned a first-time issuer rating of B-/Stable to Beton Plus d.o.o. Scope has also assigned a preliminary bond rating of (P) B- to the company’s planned RSD 10bn senior unsecured bond.

The issuer rating is weakly positioned at the B- level with limited headroom for deviation from Scope’s ratings case. It further reflects the group’s structure following the issuance of an RSD 10bn (c. EUR 85m) unsecured bond, after which Beton Plus will become the holding entity of a newly consolidated group (‘the transaction’). The bond’s proceeds will fund the acquisition of two construction firms (Brigate d.o.o. and City Road Group Privredno Društvo d.o.o.) and Marera Properties d.o.o, a real estate company that owns 12 properties valued at EUR 169m as of the end of December 2024. All steps, including finalising the share purchase agreements for the three acquisition targets, issuing the bonds and transferring ownership, are expected to be completed by February 2026. Legal restructuring, including the merger of Marera Property Management d.o.o., Marera Construction d.o.o. (the current entity holding the issuer) and Marera Services d.o.o. into the issuer, will follow within three to six months, subject to timely approvals from banks and stakeholders.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: B (new). The business risk profile is supported by the post-transaction vertical integration across real estate design, construction, development and property management, which should create operational synergies. The group benefits from a good-quality commercial property portfolio in the second-tier market of Belgrade, featuring high occupancy and a balanced lease maturity profile that ensures visibility of short- to medium-term rental cash flow and operating margins. However, the issuer’s small scale in both real estate and industrial activities, which includes construction and construction materials, as well as business services, limits its resilience and competitive strength. High customer and supplier concentration in the construction sub-segment and the geographic concentration in Serbia expose the group to cash flow volatility and local market cycles, which are only partially mitigated by the recurring rental income.

Beton Plus’ industrial division occupies a significant position in Belgrade’s ready-mix concrete market. It holds an estimated 10%–20% market share and has a strong Scope-adjusted EBITDA* margin of 15%–25%. Integrating MPM into the division will also introduce exposure to property and facility management activities. Marera Property Management currently manages 3.4m square metres of real estate. However, the issuer’s small size, limited geographic reach and reliance on a few customers and suppliers reduce its resilience and increase its cash flow volatility.

While its expansion into regional markets via the targeted launch of operations in Novi Sad and the construction sector will improve its scale and vertical integration, it also introduces execution risk and exposes the company to lower-margin, cyclical construction operations. The concentration of customers and suppliers increases the division's vulnerability to cost inflation and demand fluctuations.

Although short-term demand in Belgrade is supported by infrastructure projects, structural risks remain high due to geographical and sectoral concentration. Expansion is expected to put pressure on the EBITDA margins of the industrial activities, which are forecast to decline to around 10%, thereby reducing the predictability of cash flow and reinforcing the company’s exposure to local market cycles.

Beton Plus’ real estate division (Marera Properties) is a major player in Serbia’s commercial property market, although it is small in a European context. The portfolio is highly concentrated: Belgrade accounts for 66% of the portfolio's value and 45% of its gross lettable area, while Novi Sad represents 23% of the portfolio's value. The three largest assets account for 56% of the total portfolio value, highlighting structural concentration risk.

Occupancy remains near 100%, supported by modern assets with an economic age of below nine years and full BREEAM certification. While diversification across office (38% of gross lettable area), industrial (44%) and retail (19%) properties mitigates some cyclicality, tenant credit quality is moderate to weak. The top three tenants contribute 22% of revenue (Desk&More – a subsidiary of the issuer: 12%; Clarivate: 6%; Erste Bank: 4%), while the top 10 account for 36%. WAULT is around four years, supported by five-year office leases and five- to 10-year industrial contracts. This provides short-term cash flow visibility despite structural risks arising from geographic and tenant concentration.

Historically, the EBITDA margin has remained stable, averaging around 57% between 2022 and 2024 (2024: 57.5%). While these margin levels are solid, they remain below those of diversified buy-and-hold real estate companies. The stability of the margin is supported by consistently high occupancy rates in recent years and robust rental growth, driven by CPI-linked indexation and positive reversion on lease renewals.

From 2026 onwards, Scope expects profitability to gradually improve and remain above 60%. This will be driven by continued strong operating performance, including positive indexation and rental uplift, high occupancy levels of close to 100%, and a growing revenue base from planned investments (including extensions to Pobeda Hall and Zemun Park II).

Financial risk profile: CCC (new). The financial risk profile reflects the company’s high post-transaction leverage and limited ability to reduce its debt burden, given that free operating cash flow (FOCF) is only expected to break even. This exposes the company to liquidity risk, though manageable.

Scope expects Beton Plus to achieve break-even cash flow coverage following the implementation of the targeted structure, with capital expenditure – primarily for real estate – funded by internal cash generation. However, anticipated break-even FOCF limits the capacity for organic deleveraging and provides only limited resilience to earnings volatility linked to the cyclical nature of the construction and real estate markets. This could expose cash flows to downturns, increasing reliance on external financing.

The limited resilience to earnings volatility is exacerbated by Beton Plus' weak leverage profile. Its pro-forma loan/value ratio for real estate activities is projected to rise to around 80% following the implementation of the targeted structure, up from 55%–60% beforehand. This exceeds investment-grade thresholds, indicating an aggressive capital structure for a buy-and-hold real estate model. The debt/EBITDA ratio is expected to reach 11x for real estate activities and around 5x for industrial activities, compared to around 9x and 3x–4x, respectively, prior to the transaction. The funds from operations/debt ratio is expected to decline to around 10% for industrial activities, indicating limited debt servicing capacity. High leverage is expected to persist due to limited organic deleveraging capacity. Therefore, Scope considers the company’s ability to maintain access to external funding and manage investment appetite to be critical.

Interest coverage is anchored by the buy-and-hold real estate portfolio, with the EBITDA interest cover weak at around 1.5x following the implementation of the targeted structure. Although the real estate portfolio benefits from partial interest rate protection in the form of micro-hedges of 75%–100% per loan, its high debt burden and capital intensity mean that interest coverage remains sensitive to changes in borrowing costs. The planned senior unsecured bond, which Scope partly attributes to real estate activities, will raise the weighted average cost of debt to over 6% (up from 5.6% at the end of June 2025). This will put pressure on interest coverage in the short term, despite improving the debt mix towards fixed-rate debt. Forex risk is currently contained. Although half of the post-transaction debt is in euros and only partially matched by euro-denominated income, the Serbian dinar is under a managed float by Serbia’s central bank. This limits forex volatility and thus the erosion of earnings from currency movements. Overall, the issuer’s portfolio has the stability typical seen in a buy-and-hold real estate portfolio; however, those features are not robust enough to offset the low margin of safety for the more volatile interest coverage of industrial activities given the following risk characteristics: i) a more volatile earnings stream; and ii) a high share of unhedged debt (around one-third after the bond issuance).

Liquidity: inadequate, -1 notch (new). The company’s liquidity is constrained by its reliance on external financing and its limited cash reserves after the bond proceeds are used to achieve the target structure. While short-term maturities in 2026 appear manageable assuming a successful bond issuance, the lack of meaningful FOCF generation limits natural deleveraging and increases refinancing risk. This is a key credit concern given the company's exposure to both industrial and real estate sectors.

The main challenge arises in 2027 due to the concentration of maturities: EUR 15m related to the issuer’s industrial activities plus EUR 15m of secured real estate debt. Although collateralised real estate debt is likely to be refinanced and the higher leverage due to the unsecured debt issuance should not restrict access to secured funding, there is still an element of execution risk. While regional refinancing practices and access to secured funding provide some mitigation of refinancing risk, constant dependence on external financing highlights vulnerability to market conditions, making liquidity a key rating sensitivity.

Supplementary rating drivers: credit-neutral (new). The rating has no adjustments related to financial policy, peer group considerations, parent support, or governance and structure. The company’s financial risk profile reflects observations regarding the significant cash outlay required to acquire Marera Properties and consolidate Marera Property Management.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation of the successful execution of the RSD 10bn bond issuance, the planned acquisitions and the group restructuring. It also takes into account the continued weak credit metrics and the absence of incremental debt issuances. Furthermore, the Outlook considers the continued access to external financing required to repay or refinance maturing debt.

The upside scenario for the ratings and Outlook is:

• Positive FOCF, enabling organic deleveraging.

The downside scenario for the ratings and Outlook is:

• Perceived increase in liquidity risk, as indicated by covenant breaches, ongoing high leverage restricting access to external funding, or poor FOCF resulting from weak operating performance.

Debt rating

Beton Plus plans to tap the bond market with a first-time RSD 10bn (EUR 85m) senior unsecured bond issue in Q1 2026, to which Scope assigns a preliminary bond rating of (P) B-.

The projected liquidation value of EUR 164m at YE 2027 is expected to largely cover creditors’ claims of about EUR 211mn, including payables. Although the recovery rate for the senior unsecured bond is estimated to be above average, the rating reflects the constraints imposed by its unsecured status and the potential increase in senior secured debt resulting from the structural subordination of the issuer’s creditors. This is because there are no contractual limitations on the indebtedness of Beton Plus or entities held by the issuer, either directly or indirectly. Further, there are no restrictions of Beton Plus to issues guarantees.

Environmental, social and governance (ESG) factors

The pre-transaction corporate structure is complex, primarily due to the cross-border shareholding arrangements and the steps required for ownership consolidation. This exposes the company to operational risk, execution risk, reduced transparency, weaker access to cash flow and structural subordination risk. However, the target structure is more streamlined, which partially mitigates these concerns. The structural subordination of the issuer’s creditors remains a key concern.

Visibility on the financial strength of the ultimate beneficial owner is limited. Management confirmed there is no debt burden requiring support from the issuer or its holdings via related-party loans or dividend payouts, reducing risk of cash extraction.

All rating actions and rated entities

Beton Plus d.o.o.

Issuer rating: B-/Stable, new

Senior unsecured RSD 10bn bond rating: (P) B-, new

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Construction and Construction Materials Rating Methodology, 24 January 2025; European Real Estate Rating Methodology, 2 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Philipp Wass, Managing Director
Person responsible for approval of the Credit Ratings: Karl Yuan Pettersen, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 7 January 2026.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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