Schroder European Real Estate Investment Trust has completed a five-year debt refinancing secured against the company’s five-asset Dutch industrial portfolio.
The refinancing is based on a margin of 2.0%, which is 0.15% below the existing margin. Reflecting the competitive terms offered by four different banks, the company has elected to extend the facility by a further €4.5 million, to €13.8 million, by adding two un-levered industrial assets in Alkmaar and Venray as security.
The new facility has been fixed at c. 5.3% being the five-year euro swap rate (c. 3.3%) plus 2.0% margin. The debt is accretive given the net initial yield of the Dutch industrial portfolio is c.6.2%.
Following this transaction, the Company’s third party debt totals €85.5 million across seven loan facilities. The loan to value (‘LTV’) of c. 31% against the Company’s gross asset value (c. 23%1 net of cash) is comfortably below the LTV prospectus limit of 35% net of cash. All facilities are on a non-recourse lending basis.
Following draw down, the weighted average loan term increases by nine months to 2.6 years (as of 30 September 2023). The Company’s blended all-in interest rate increases c. 30 basis points to 2.9%. The Company is having positive ongoing discussions regarding two debt expiries due in 2024.
Jeff O’Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, commented: “Following on from the successful German office refinancing concluded at the end of 2022, the terms of this new facility are a strong endorsement of our strategy and testament to the relationships we have with existing financing partners as well as our reputation in the market. The company has a robust balance sheet, providing the necessary flexibility to deliver on our strategy and react to changing market conditions as new opportunities arise.”
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