UK multi-let industrial(MLI) REIT Stenprop has secured a new seven-year, £66.5 million fixed rate senior debt facility with ReAssure.
The new debt facility refinances an existing £61.5 million loan, which was due to expire in June 2022, and is secured against a portfolio of 30 multi-let industrial assets located across the UK with a loan to value ratio of 38%.
”The new facility allows the Company to significantly reduce its financing costs by around £930,000 per annum as a result of the new loan being fixed at an annual rate of 1.66% compared to 3.2% on the previous arrangement,” said in the statement. ”The additional drawn funds have been used to finance a recent MLI acquisition in Cardiff together with the costs associated with putting the loan facility in place.”
Stenprop said across the whole MLI portfolio the transaction reduces the cost of debt from 3% to 2.2% and substantially extends the weighted average maturity from 2.8 years to 5.6 years.
“The completion of this refinancing provides us with long term stable capital, as well as the support of an institutional partner. The timing has allowed us to take advantage of the historically low interest rate environment and strong lender interest for exposure to the high growth industrial sector in order to deliver substantial savings for the business on behalf of shareholders. As we continue our transition to being 100% MLI by the end of the 2021/22 financial year we remain flexible in our approach to seeking ways to optimise our balance sheet,” commented James Wakelin, Head of Debt and Special Projects.