TIDMSWEF
RNS Number : 1802Q
Starwood European Real Estate Finan
28 August 2014
Starwood European Real Estate
Finance Limited
Interim Financial Report and Unaudited Condensed Consolidated
Financial Statements for the six month period from 1 January 2014
to 30 June 2014
Principal Activities and Investment Objective
The investment objective of Starwood European Real Estate
Finance Limited ("the Company"), together with its subsidiaries
Starfin Public GP Limited ("the GP"), Starfin Public LP ("the
Partnership") and Starfin Lux S.à.r.l. ("Luxco") (together "the
Group") is to provide its shareholders with regular dividends and
an attractive total return while limiting downside risk, through
the origination, execution, acquisition and servicing of a
diversified portfolio of real estate debt investments (including
debt instruments) in the UK and Continental European markets.
Whilst investment opportunities in the secondary market are
considered, the Group's main focus is to originate direct primary
real estate debt investments.
The Group attempts to limit downside risk by focusing on secured
debt with both quality collateral and contractual protection. The
typical loan term is between three and seven years and at least 75
per cent of total loans by value are for a term of seven years or
less.
The Group aims to be appropriately diversified by geography,
real estate sector, loan type and counterparty. The Group pursues
investments across the commercial real estate debt asset class
through senior loans, subordinated loans and mezzanine loans,
bridge loans, selected loan-on-loan financings and other debt
instruments.
Structure
The Company was incorporated with limited liability in Guernsey
under the Companies (Guernsey) Law, 2008, as amended, on 9 November
2012 with registered number 55836, and has been authorised by the
Guernsey Financial Services Commission ("GFSC") as an authorised
closed-ended investment company. The Company's ordinary shares were
admitted to the premium segment of the UK Listing Authority's
Official List and to trading on the Main Market of the London Stock
Exchange as part of its initial public offering which completed on
17 December 2012. The issued capital during the period comprises
the Company's ordinary shares denominated in Sterling.
The Company makes its investments through Starfin Lux S.à.r.l
("Luxco"), an indirect wholly-controlled subsidiary not subject to
regulation in Luxembourg or elsewhere. The Company's interest in
Luxco is held through a Guernsey limited partnership, Starfin
Public LP ("the Partnership") of which Starfin Public GP Limited
("the GP") is the general partner. The GP is wholly owned and
controlled by the Company. Starfin Carry LP ("The Special Limited
Partner") is the only other limited partner of the Partnership and
is majority owned by the Starwood Capital Group ("Starwood") and
has no control over the GP (see related party transactions).
References to the "Group" refer to the Company, the GP, the
Partnership and Luxco.
The Investment Manager during the period was Starwood European
Finance Partners Limited ("the Investment Manager"), a company
incorporated in Guernsey with registered number 55819 and regulated
by the GFSC. The Investment Manager has appointed Starwood Capital
Europe Advisers, LLP ("the Investment Adviser"), an English limited
liability partnership authorised and regulated by the Financial
Conduct Authority, to provide investment advice, pursuant to an
Investment Advisory Agreement.
Chairman's Statement
Dear Shareholder,
I am delighted to present the Interim Financial Report and
Unaudited Condensed Consolidated Financial Statements of Starwood
European Real Estate Finance Limited for the six months from 1
January 2014 to 30 June 2014.
Deployment of net IPO proceeds
I am pleased to report that as anticipated the Group reached
substantially full investment during the first half of 2014. As at
30 June 2014, the Group had committed 96 per cent. of the net IPO
proceeds and subsequent tap issues ("Net Proceeds") of GBP233.8
million. Of this committed amount approximately 91 per cent. was
actually invested as at 30 June 2014, lower than the committed
amount due to some amortisation received since original commitments
were made on two loans and some commitments still to be drawn on
two of the loans.
Shortly after 30 June 2014 the Group committed a further EUR25
million to the W Hotel in Amsterdam meaning that all Net Proceeds
have now been committed. As at 26 August 2014, EUR9.7 million of
this had been drawn bringing the Company to approximately 94 per
cent. of Net Proceeds invested after accounting for amortisation
which took place during July. Once the W Hotel loan has been
substantially drawn, the Group will be generating a net portfolio
yield of 6.9 per cent.
In the factsheets published by the Company during the year, it
was noted that some of the new opportunities in the pipeline would
require subsequent syndication to achieve target return levels. Of
the loans originated to date the Group expects to syndicate
approximately GBP42 million, releasing this for reinvestment in
order to increase the net portfolio yield (once the W Hotel is
substantially drawn) up from
6.9 per cent. to in excess of 7 per cent. We are in advanced
discussions with credit approved acquirers in respect of these
loans and expect to complete the syndications during the second
half of the year.
Managing the timing and occurrence of these syndications with
opportunities to re-invest the proceeds will be important to
minimising cash drag and maintaining current returns.
A foundation stone of the formation of the Group was the
emphasis on relative risk/return. It is incumbent for the Group to
continue to focus on this and not simply absolute return. It
follows that for any potential investment in Southern Europe,
following the change to the Investment Policy, the Group will
adhere rigorously to this principle.
Investment Policy
On 2 May 2014 the Company held its first Annual General Meeting
and an Extraordinary General Meeting to approve a change to the
investment policy of the Group, to extend the geographic scope of
the investment policy to allow investment in Spain and Italy, and
to increase the maximum allocation that can be made to the
residential for sale sector. The Company confirmed at the time that
it did not intend to use these extended investment powers until the
Net Proceeds were substantially fully invested. Now that the
Company has fully deployed the Net Proceeds within the parameters
of the original investment policy we will continue to focus on the
relative risk / return of opportunities which fall within this
extended investment policy.
Alongside these changes, the Board believed it was necessary to
clarify the scope and intent of the restrictions on the Company's
corporate borrowings to exclude foreign exchange hedging facilities
from the scope of "corporate borrowings".
I am pleased to confirm that these changes to the investment
policy were approved by the Company's shareholders.
Dividends
At launch, the Company had targeted a dividend of 7.0 pence per
Ordinary Share upon full investment.
On 23 April 2014 the Company declared a dividend for the period
from 1 January 2014 to 31 March 2014 of 1.25 pence per Ordinary
Share being an annualised 5.00 pence per Ordinary Share.
On 23 July 2014 the Company declared a dividend for the period
from 1 April 2014 to 30 June 2014 of
1.35 pence per Ordinary Share, being an increase to 5.40 pence
per Ordinary Share on an annualised basis, principally reflecting
the reduced impact of historical cash drag.
As noted above, the Group will be delivering a net portfolio
yield of 6.9 per cent once the W hotel loan is substantially drawn.
Based on the current syndication plans and deals in the pipeline to
re-invest those proceeds, the Company remains comfortable that it
will be able to pay an annualised 7.0 pence dividend upon
completion of the syndication and re-investment, expected to be
completed in the second half of 2014.
Going Concern
Under the UK Corporate Governance Code and applicable
regulations, the directors are required to satisfy themselves that
it is reasonable to assume that the Company is a going concern.
The directors have undertaken a rigorous review of the Group's
ability to continue as a going concern including reviewing the
on-going cash flows and the level of cash balances as of the
reporting date as well as taking forecasts of future cash flows
into consideration.
After making enquiries of the Investment Manager and the
Administrator, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt a
going concern basis in preparing these unaudited condensed
consolidated financial statements.
Outlook
The directors place primary importance on maintaining a
consistent dividend and ensuring, as much as possible, that cash
drag does not materially impact this aim. Any future plans to raise
additional equity will be considered against this objective.
It is the intention of the Company to seek to implement
permitted liquidity facilities up to an amount of GBP50 million
(and in any event limited to 20 per cent. of Net Asset Value) that
may be utilised to assist in the rapid securing of additional
investment opportunities, as a bridge to the raising of additional
equity or repayment of existing loans and for other short term cash
management purposes.
The board is satisfied with the progress made by the Investment
Manager and Investment Adviser during the period in reaching
substantially full investment. Whilst market conditions have
changed since the IPO, the Investment Adviser and Investment
Manager, working in close collaboration with the Board, have
maintained a disciplined and rigorous approach to investment and
continue to operate within the risk parameters set out within the
prospectus.
The Company will continue to update you on progress by way of
the quarterly fact sheets and investment updates when deals are
signed.
On behalf of the board, I would like to close by thanking
shareholders for your commitment and I look forward to updating you
on the Company's progress later this year.
Stephen Smith
Chairman
27 August 2014
Investment Manager's Report
Investment Deployment
As at 30 June 2014 the Group had committed 96 per cent. of Net
Proceeds through the following investments and was approximately 91
percent. invested as a percentage of Net Asset Value:
Original Commitment(1) Principal
Outstanding
as at 30
June 2014
=================================== ======================= =============
Maybourne Hotel Group, London GBP19.0 m GBP19.0 m
West End Development, London GBP10.0 m GBP10.0 m
Lifecare Residences, London GBP14.5 m GBP13.0 m
Heron Tower, London GBP18.0 m GBP16.5 m
Centre Point, London GBP40.0 m GBP40.0 m
FC200, London GBP27.0 m GBP21.7 m
=================================== ======================= =============
Sterling Loans GBP128.5 m GBP120.2
m
=================================== ======================= =============
Retail Portfolio - Finland EUR45.0 m EUR42.1 m
Industrial Portfolio, Netherlands EUR55.9 m EUR55.9 m
Office, Netherlands EUR14.3 m EUR14.3 m
=================================== ======================= =============
EUR112.3
Euro Loans EUR115.2 m m
=================================== ======================= =============
(1) Commitments include PIK facilities over the life of two
loans for a total of approximately GBP5m. A subsequent EUR25m loan
commitment was made in early July on the W Hotel, Amsterdam.
Since 31 December 2013, the Group has made the following further
commitments (included in the table above):
Office, Amsterdam: The Group provided a EUR14.3 million
financing facility for the acquisition of an office building in
Amsterdam fully occupied by UPC Nederlands, BV. The Group expects
to earn a solid single digit return in line with its investment
criteria. The loan was fully drawn in the middle of April 2014.
FC200, London: The Group provided a GBP27 million financing
facility for an office building in Park Royal, West London. GBP21.7
million of the available facility was drawn in early June with a
further GBP0.4 million drawn in July. The three year financing is
secured against a six-storey, 160,000 square foot building named
FC200 located within the First Central mixed-use development site
in Park Royal. The financing allowed the sponsors to refinance the
all-cash acquisition of the property in late 2011 as well as
providing funding for the remaining capex to complete its fit out.
The Group expects to earn a solid single digit return in line with
its investment criteria.
Industrial Portfolio, Netherlands: On 30 June 2014, the existing
EUR35.3 million whole loan facility was increased by EUR36.1
million to a total facility of EUR71.4 million in cooperation with
private debt funds associated with Starwood Capital Group. The
Group's overall exposure increased to EUR55.9 million with the
Starwood associated private debt funds taking the remaining
EUR15.5m. The additional funds facilitated the acquisition of nine
light-industrial and office properties in the Netherlands taking
the overall portfolio to 28 assets. This marks the final increase
in the facility as MBay, the joint venture between M7 Real Estate
and Bayside Capital, completes its current light-industrial Dutch
acquisitions strategy.
The following loan was committed after 30 June 2014:
W Hotel, Amsterdam: The Group has committed to provide EUR25
million out of a total of EUR99 million for the refinancing and
refurbishment of a new W branded hotel located in the centre of
Amsterdam. The sponsor is Liran Wizman, a highly experienced hotel
owner and key shareholder in Grand City Hotels, a highly rated
pan-European hotel management company. Expected to be completed in
the third quarter of
2015, the refurbished hotel is based on Spuistraat, a prime
location within the city and providing easy access to transport
links and attractions including the Royal Palace and Dam Square,
which the hotel adjoins. The first drawdown by the borrower under
this facility of approximately EUR9.3 million was made on
17 July 2014 with a further drawdown of GBP0.4 million in
August.
Since 30 June 2014 (to 26 August 2014) the Group also received a
EUR1.3 million prepayment on the Retail
Portfolio, Finland and a scheduled amortisation receipt on the
Heron loan of GBP0.8 million.
Company Performance as at 30 June 2014
As at 30 June 2014 the Net Asset Value ("NAV") was 98.91 pence
per Ordinary Share and the share price was 103 pence.
Portfolio Statistics
As at 30 June 2014, the portfolio was invested in line with the
Group's investment policy and is summarised below.
The board considers that the Group is engaged in a single
segment of business, being the provision of a diversified portfolio
of real estate backed loans. The analysis presented in this report
is presented to demonstrate the level of diversification achieved
within that single segment. The board does not believe that its
investments constitute separate operating segments.
30 June 2014
Number of borrowers 9
Number of investments 9
Percentage of currently invested portfolio in floating
rate loans (1) 47.9%
Invested Loan Portfolio annualised total return (2) 8.6%
Weighted average portfolio LTV - to Group first GBP
(3) 9.8%
Weighted average portfolio LTV - to Group last GBP
(3) 60.1%
Average loan term 4.1 years
Percentage of Net Proceeds uncommitted (4) 4.0%
Percentage of Net Proceeds committed to senior and
whole loans (4) 75.8%
Percentage of Net Proceeds committed to second lien
and mezzanine loans (4) 12.5%
Percentage of Net Proceeds committed to other debt
instruments (4) 7.7%
Percentage currently invested in GBP (1) 56.2%
Percentage currently invested in Euro (1) 43.8%
(1) Calculated on the current value of loans and are shown after
taking into account prepayments received to 30 June 2014 and
exclude amounts committed but undrawn and cash currently
un-invested (but which may be committed).
(2) Calculated on amounts currently outstanding and assuming all
loans are outstanding for the full term. Five of the loans are
floating rate (some with floors) and returns are based on an
assumed profile for future LIBOR or EURIBOR but the actual rate
received may be higher or lower. Calculated only on loans closed to
date and excluding cash uninvested.
(3) LTV to Group last GBP means the percentage which the total
loan currently outstanding (when aggregated with any other
indebtedness ranking alongside and/or senior to it) bears to the
market value determined by the last valuation. LTV to first Group
GBP means the starting point of the loan to value range of the loan
currently outstanding (when aggregated with any other indebtedness
ranking senior to it). For ground up development (Lifecare) the
calculation includes the total facility available and the market
value on completion of the project. Where the loan relates to a
redevelopment project with facilities currently undrawn (Centre
Point) the calculation includes current debt drawn against the
lower of current use market value and vacant possession value. Upon
commencement of development, the loan to value will be tested by
reference to loans drawn plus available loans against a value
assuming completion of the development. This calculation will
therefore change as the other facilities are drawn. LTVs are
calculated for each loan and weighted by the Group's investment in
each loan.
(4) Calculated based on the original loan amount including
amounts which may have since been repaid as amortisation and
including amounts which are committed but currently undrawn. This
is expressed as a percentage of net IPO proceeds plus net amounts
raised in the subsequent tap issues (GBP233.8m).
Future Strategy and Investment Outlook
In the March factsheet published by the Company in order to keep
shareholders updated, the Company noted that some of the new
opportunities in the pipeline would require subsequent syndication
to achieve
target return levels. Of the loans originated to date, the Group
expects to syndicate approximately GBP42
million, releasing this for reinvestment in order to increase
the net portfolio yield up from 6.9 per cent. to in excess of 7 per
cent. We are in advanced discussions with credit approved acquirers
in respect of these loans and expect to complete the syndications
during the second half of the year.
As noted in the Chairman's Statement, managing the timing and
occurrence of these syndications with opportunities to re-invest
the proceeds will be important to minimising cash drag and
maintaining current returns.
The Group is focused on relative risk/return rather than
absolute return and will continue to focus on this rigorously as it
continues to invest in line with its expanded investment
policy.
Any pipeline for the Group has to flex and adapt to the changing
market dynamics. In the market commentary section below it is clear
that certain markets have now fully recovered, indeed some may be
showing very early signs of overheating. Central London, for
example, is one such market. It is not that the Group would not
invest further in such markets, merely that it is now applying a
higher degree of caution. Starwood Property Trust recently
announced the provision of a GBP101.8 million loan for the
development of London residential property. Whilst the specifics of
the loan itself were attractive, the Investment Adviser, Investment
Manager and directors felt the Group now had sufficient London
residential exposure to warrant declining any participation.
However, the scale of the UK market means that attractive
risk/return is still sourceable especially in regional markets. As
is evident in recent transactions, Holland remains a key focus for
new business. Whilst an Irish investment has not yet been effected
the Group remains positive on this market for deployment of
capital. Central Europe has become more interesting as the asset
quality review appears to be unlocking a number of potential
situations. Following approval to adjust the investment policy
guidelines, Italy and Spain are being considered on a cautious risk
adjusted basis.
Overall a pipeline of opportunities continues to exist
reflecting the geographical comments above. At this stage it is
felt the UK will still account for over 50 per cent. of capital in
the medium term. The Group continues to seek strong sector
diversity. Whilst the proportion of whole loans is high at 79 per
cent. of the current loan book it is expected to fall. The Group's
key access to deal flow is through the provision of whole loans but
it is now more active in the subsequent syndication of senior
positions to enhance returns through the retention of mezzanine,
especially in the UK.
The Company will concentrate on generating attractive risk
adjusted returns through underwriting whole loans and in selective
cases selling senior strips to generate mezzanine positions. This
will rebalance the overall book back towards the loan mix set out
at IPO whilst maintaining attractive single digit gross
returns.
Market Summary
Previous commentary, including that included within our
quarterly factsheets has highlighted the continued dichotomy of the
European Capital Markets. On one side macroeconomic policy,
including the
European Central Bank's announcements, continue to ensure the
market has strong liquidity and a
penchant for hunting yield. On the other side the on-going need
for deleveraging as well as addressing problem situations by banks
has been turbo charged by the asset quality review. Events in
Portugal are perhaps an example of other situations likely to occur
over the coming months which encourage macro risk whilst also
creating deal level opportunities.
This dichotomy is therefore still an overriding theme of the
real estate capital markets. Certain markets have arguably fully
recovered - Central London office and residential as cases in
point. Other markets such as Spain seem to see patches of perhaps
optimistic exuberance. Hand in hand lenders, notably US investment
banks, have re-found an interest in the provision of loan capital.
Any investment deal of low to reasonable leverage in core sectors
and with good sponsors now attracts excess liquidity which has
resulted in substantial pricing decline. However the other side of
the dichotomy is throwing off ever greater opportunities including
the continued need for the structured finance solutions that the
Group specialises in.
In summary, the market recovery inevitably requires us to strike
a balance between the continuing opportunity and taking an
increasingly prudent approach to new business and portfolio
management.
Principal Risks for the Remaining Six Months of the year to 31
December 2014
The principal risks assessed by the board relating to the Group
were disclosed in the Annual Report and Audited Consolidated
Financial Statements for the period from 9 November 2012 to 31
December 2013. The board and Investment Manager do not consider
these risks to have changed. However, the following are the
principal risks assessed by the board and the Investment Manager as
relating to the Group for the remaining six months of the year to
31 December 2014.
-- The Group plans to syndicate a number of loans in the second
half of 2014 in order to reach return levels in excess of 7 per
cent. Any delay in re-deployment of the funds following
syndications could lead to a reduction in the dividends as a result
of cash drag;
-- The Company's targeted returns are based on estimates and
assumptions that are inherently subject to significant business and
economic uncertainties and contingencies, and the actual rate of
return may be materially lower than the targeted returns;
-- The level of dividends and other distributions to be paid by
the Company may fluctuate and there is no guarantee that any such
distributions will be paid;
-- The Company hedges currency exposures in a prudent manner.
However, our currency hedging strategies may not eliminate all of
our currency risk due to, among other things, uncertainties in the
timing and/ or amount of payments received on the related
investments. Additionally we may be required under certain
circumstances to collateralise our currency hedges for the benefit
of the hedge counterparty, which could adversely affect our
liquidity;
-- The shares may trade at a discount to NAV per share and
shareholders may be unable to realise their investments through the
secondary market at NAV per share; and
-- Principal may be repaid earlier than anticipated, causing the
return on certain investments to be less than expected.
Related Party Transactions
Related party disclosures are given in note 13 to the financial
statements.
Starwood European Finance Partners Limited
Investment Manager
27 August 2014
Board of Directors
Stephen Smith (non-executive chairman - chairman of the
board)
Stephen is currently a director of Gatehouse Bank Plc (appointed
in June 2013) and a director of Tritax
Big Box REIT Plc, which floated on the London Stock Exchange in
December 2013. Previously, he was the Chief Investment Officer of
British Land Company PLC, the FTSE 100 real estate investment trust
from January 2010 to March 2013 with responsibility for the group's
property and investment strategy, leaving at the end of June 2013.
He was formerly Global Head of Asset Management and Transactions at
AXA Real Estate Investment Managers, where he was responsible for
the asset management of a portfolio of more than EUR40 billion on
behalf of life funds, listed property vehicles, unit linked and
closed end funds. Prior to joining AXA in 1999 he was Managing
Director at Sun Life Properties for five years. Stephen is a UK
resident.
Jonathan Bridel (non-executive director - management engagement
committee chairman)
Jonathan is currently a non-executive chairman or director of
listed and unlisted companies comprised mainly of investment funds
and investment managers, including Alcentra European Floating Rate
Income Fund Limited, Aurora Russia Limited, DP Aircraft I Limited,
The Renewables Infrastructure Group Limited and Fair Oaks Income
Fund Limited. He was previously Managing Director of Royal Bank of
Canada's investment business in the Channel Islands. Prior to this,
after working at Price Waterhouse Corporate Finance in London,
Jonathan served in senior management positions in the British Isles
and Australia in banking, specialising in credit and in private
businesses as Chief Financial Officer. Graduating from the
University of Durham with a degree of Master of Business
Administration in 1988, Jonathan also holds qualifications from the
Institute of Chartered Accountants in England and Wales where he is
a Fellow, the Chartered Institute of Marketing and the Australian
Institute of Company Directors. Jonathan is a Chartered Marketer
and a member of the Chartered Institute of Marketing, the Institute
of Directors and Chartered Fellow of the Chartered Institute for
Securities and Investment. Jonathan is a resident of Guernsey.
John Whittle (non-executive director - audit committee
chairman)
John is a chartered accountant and holds the Institute of
Directors Diploma in Company Direction. He is a non-executive
director of International Public Partnerships Limited (FTSE 250),
India Capital Growth Fund
Limited, Globalworth Real Estate Investments Limited and Advance
Frontier Markets Fund Limited (all listed on AIM) and also acts as
non-executive director to several other Guernsey investment funds.
He was previously Finance Director of Close Fund Services, a large
independent fund administrator, where he successfully initiated a
restructuring of client financial reporting services and was a key
member of the business transition team. Prior to moving to Guernsey
he was at Price Waterhouse in London before embarking on a career
in business services, predominantly telecoms. He co-led the
business turnaround of Talkland International (now Vodafone Retail)
and was directly responsible for the strategic shift into retail
distribution and its subsequent implementation; he subsequently
worked on the GBP20million private equity acquisition of Ora
Telecom. John is also a resident of Guernsey.
Statement of Directors' Responsibilities
To the best of their knowledge, the directors of Starwood
European Real Estate Finance Limited confirm that:
(a) The Unaudited Condensed Consolidated Financial Statements
have been prepared in accordance with IAS 34, "Interim Financial
Reporting" as adopted by the European Union; and
(b) The Interim Financial Report, comprising of the Chairman's
Statement and the Investment Manager's Report, meets the
requirements of an interim management report and includes a fair
review of information required by:
(i) DTR 4.2.7R of the UK Disclosure and Transparency Rules,
being an indication of important events that have occurred during
the first six months and their impact on the Unaudited Condensed
Consolidated Financial Statements, and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(ii) DTR 4.2.8R of the UK Disclosure and Transparency Rules,
being related party transactions that have taken place in the first
six months and that have materially affected the financial position
or performance of the Company during that period, and any material
changes in the related party transactions disclosed in the last
Annual Report.
By order of the Board
For Starwood European Real Estate Finance Limited
Stephen Smith John Whittle
Chairman Director
27 August 2014 27 August 2014
Independent Review Report to Starwood European Real Estate
Finance Limited
Introduction
We have been engaged by Starwood European Real Estate Finance
Limited ("the Company") to review the
Unaudited Condensed Consolidated Financial Statements in the
interim financial report for the half year ended
30 June 2014, which comprises the Unaudited Condensed
Consolidated Statement of Comprehensive Income, the Unaudited
Condensed Consolidated Statement of Financial Position, the
Unaudited Condensed Consolidated Statement of Changes in Equity,
the Unaudited Condensed Consolidated Statement of Cash Flows and
related notes. We have read the other information contained in the
interim financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the Unaudited Condensed Consolidated Financial
Statements.
Directors' responsibilities
The interim financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the interim financial report in accordance with the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Company are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The Unaudited
Condensed Consolidated Financial Statements included in this
interim financial report have been prepared in accordance with
International Accounting Standard 34, "Interim Financial Reporting"
as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the Unaudited Condensed Consolidated Financial Statements in the
interim financial report based on our review. This report,
including the conclusion, has been prepared for and only for the
Company for the purpose of the Disclosure and Transparency Rules of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements 2410, 'Review of Interim Financial
Information Performed by the Independent Auditor of the Entity'
issued by the International Auditing and Assurance Standards Board.
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the Unaudited Condensed Consolidated
Financial Statements in the interim financial report for the half
year ended 30 June 2014 are not prepared, in all material respects,
in accordance with International Accounting Standard 34, "Interim
Financial Reporting" as adopted by the European Union, and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
PricewaterhouseCoopers CI LLP Chartered Accountants
Guernsey, Channel Islands
27 August 2014
Publication of Interim Financial Report
The maintenance and integrity of the Starwood European Real
Estate Finance Limited website is the responsibility of the
directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to
the interim financial report and unaudited condensed consolidated
financial statements since they were initially presented on the
website.
Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Unaudited Condensed Consolidated Statement of Comprehensive
Income
for the period ended 30 June 2014
1 January 1 January 1 January
2014 to 2013 to 2013 to
31 December
30 June 2014 30 June 2013 2013
Notes GBP GBP GBP
(unaudited) (unaudited) (audited)
Income
Income from loans
advanced 7 7,011,394 1,183,053 5,336,230
Income from cash
and cash equivalents 102,377 382,128 635,797
Total income from
investments 7,113,771 1,565,181 5,972,027
Expenses
Investment management
fees 636,764 77,051 417,951
Directors' fees and
travel expenses 57,929 74,042 132,267
Administration fees 112,554 93,685 225,071
Auditors' fees 103,123 54,089 88,150
Broker's fees 49,786 53,699 104,110
Legal and professional
fees 66,806 72,901 130,341
Insurance 27,583 33,165 61,205
Net foreign exchange
losses 938,645 8,189 639,461
Other expenses 46,457 60,937 86,656
Total operating expenses 2,039,647 527,758 1,885,212
Operating profit
for the period before
tax 5,074,124 1,037,423 4,086,815
Taxation 12 3,967 1,990 2,718
Operating profit
for the period and
total comprehensive
income after tax 5,070,157 1,035,433 4,084,097
Weighted average
number of shares
in issue 238,100,000 233,348,205 235,655,145
Basic and diluted
earnings per ordinary
share (pence) 2.13 0.44 1.73
Unaudited Condensed Consolidated Statement of Financial
Position
as at 30 June 2014
As at As at As at
30 June 30 June 31 December
2014 2013 2013
Notes GBP GBP GBP
(unaudited) (unaudited) (audited)
Assets
Cash and cash equivalents 6 22,300,171 215,545,841 79,706,084
Other receivables and prepayments 244,445 81,650 287,470
Loans advanced 7 211,798,229 19,491,134 156,381,277
Financial assets at fair value
through profit and loss 8 2,026,618 - 87,180
Total assets 236,369,463 235,118,625 236,462,011
Liabilities
Trade and other payables 872,197 240,030 439,552
Total liabilities 872,197 240,030 439,552
Net assets 235,497,266 234,878,595 236,022,459
Capital and reserves
Share capital 233,843,162 233,843,162 233,843,162
Retained earnings 1,654,104 1,035,433 2,179,297
Total equity 235,497,266 234,878,595 236,022,459
Number of ordinary shares in
issue 238,100,000 238,100,000 238,100,000
Net asset value per ordinary
share (pence) 98.91 98.65 99.13
Unaudited Condensed Consolidated Statement of Changes in
Equity
for the period ended 30 June 2014
Six months ended 30 June Share capital Retained Total equity
2014 earnings
GBP GBP GBP
Balance at 1 January 2014 233,843,162 2,179,297 236,022,459
Issue of share capital - - -
Cost of issues - - -
Dividends paid - (5,595,350) (5,595,350)
Operating profit and total comprehensive
income - 5,070,157 5,070,157
Balance at 30 June 2014 233,843,162 1,654,104 235,497,266
Period ended 30 June 2013 Share capital Retained Total equity
earnings
GBP GBP GBP
Balance at 9 November 2012 - - -
Issue of share capital 238,509,000 - 238,509,000
Cost of issues (4,665,838) - (4,665,838)
Dividends paid - - -
Operating profit and total comprehensive
income - 1,035,433 1,035,433
Balance at 30 June 2013 233,843,162 1,035,433 234,878,595
Period ended 31 December Share capital Retained Total equity
2013 earnings
GBP GBP GBP
Balance at 9 November 2012 - - -
Issue of share capital 238,509,000 - 238,509,000
Cost of issues (4,665,838) - (4,665,838)
Dividends paid - (1,904,800) (1,904,800)
Operating profit and total comprehensive
income - 4,084,097 4,084,097
-
Balance at 31 December
2013 233,843,162 2,179,297 236,022,459
Unaudited Condensed Consolidated Statement of Cash Flows
for the period ended 30 June 2014
Operating activities:
Operating profit for the period
and total comprehensive income 5,070,157 1,035,433 4,084,097
Adjustments for non-cash items
Net interest income (7,113,771) (1,565,181) (5,972,027)
(Increase) / decrease in prepayments
and receivables 43,025 (60,163) (287,470)
Increase in other payables
and accrued expenses 432,645 240,030 439,552
Net gain on financial instruments
held at fair value through
profit and loss (1,939,438) - (87,180)
Net foreign exchange losses 2,878,083 8,189 726,641
Other non-cash items 3,338 - 205,237
(625,961) (341,692) (891,150)
Loans advanced 1 (61,351,264) (18,857,500) (152,864,924)
Loans repaid 3,956,189 - -
Origination fees paid (497,605) (142,500) (1,171,890)
Origination expenses (5,454) (60,999) (75,413)
Interest, commitment and exit
fees income from loans advanced 6,583,632 752,918 2,140,736
Other cash items 36,480 - -
Net cash outflow from operating
activities (51,903,983) (18,649,773) (152,862,641)
Cash flows from investing
activities
Interest income from cash
and cash equivalents 110,180 360,641 627,065
Net cash outflow from investing
activities 110,180 360,641 627,065
Cash flows from financing
activities
Net share issue proceeds received
2 - 234,878,549 234,878,549
Cost of share issues - (1,035,387) (1,035,387)
Dividends paid (5,595,350) - (1,904,800)
Net cash outflow from financing
activities (5,595,350) 233,843,162 231,938,362
Net increase in cash and cash
equivalents (57,389,153) 215,554,030 79,702,786
Cash and cash equivalents
at the start of the period 79,706,084 - -
Net foreign exchange gain
on cash and cash equivalents (16,760) (8,189) 3,298
Cash and cash equivalents
at the end of the period 22,300,171 215,545,841 79,706,084
1 Net of arrangement fees of GBP 1,152,830 (2013:GBP 1,674,212)
withheld.
2 Gross shareproceeds net of fees and expenses of GBP nil (2013:
GBP 3,630,451) withheldby brokers.
Unaudited Condensed Notes to the Consolidated Financial
Statements
for the period ended 30 June 2014
1. General Information
Starwood European Real Estate Finance Limited ("the Company") is
a closed--ended investment company incorporated in Guernsey. The
unaudited condensed consolidated financial statements comprise the
financial statements of the Company, Starfin Public GP Limited (the
"GP"), Starfin Public LP (the "Partnership") and Starfin Lux S.à
r.l. ("Luxco") (together "the Group") as at 30 June 2014.
2. Going Concern
Under the UK Corporate Governance Code and applicable
regulations, the directors are required to satisfy themselves that
it is reasonable to assume that the Company is a going concern.
Note 10 includes the Group's objectives, policies and processes
for managing its capital, its financial risk management objectives,
details of financial instruments and exposure to credit risk and
liquidity risk. The directors have undertaken a rigorous review of
the Group's ability to continue as a going concern including
reviewing the on-going cash flows and the level of cash balances as
of the reporting date as well as taking forecasts of future cash
flows into consideration.
After making enquiries of the Investment Manager and the
Administrator, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt a
going concern basis in preparing these unaudited condensed
consolidated financial statements.
3. Basis of Preparation and Principal Accounting Policies
The Company has prepared these unaudited condensed consolidated
financial statements on a going concern basis in accordance with
the Disclosure and Transparency Rules of the United Kingdom
Financial Conduct Authority and IAS 34 Interim Financial Reporting
as adopted by the European Union. This interim financial
information does not comprise statutory financial statements within
the meaning of the Companies (Guernsey) Law, 2008, and should be
read in conjunction with the consolidated financial statements of
the Group as at and for the period ended 31 December 2013, which
have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The statutory
financial statements for the period ended 31 December 2013 were
approved by the board of directors on 20 March 2014. The opinion of
the auditors on those financial statements was unqualified. This
interim financial information for the period ended 30 June 2014 has
been reviewed by the auditors but not audited.
4. Accounting policies
The accounting policies are consistent with those of the
consolidated financial statements for the period ended 31 December
2013. Standards and Interpretations in issue and not yet
effective:
Effective
New Standards date
-------------------- ------ ----------------- --------- ---------- ------------
IFRS 9 Financial Instruments - Classifications 1 January
and Measurement 2018
Revised and amended standards
----------------------------------------------- --------- ---------- ------------
IFRS 8 Aggregation of Segments and Reconciliation
of Segment Assets 1 July 2014
IFRS 13 Scope of Portfolio Exception
(amended) 1 July 2014
IAS 24 Management Entities
(amended) 1 July 2014
IFRS 7/9 Mandatory Effective Date and Transition
Disclosure (amended) 1 July 2014
Unless statedotherwise the directors do not considerthe changes
to have a material impact.
5. Earnings Per Share and Net Asset Value Per Share
The calculation of basic earnings per ordinary share is based on
the operating profit of GBP5,070,157 and on the weighted average
number of ordinary shares in issue during the period of 238,100,000
ordinary shares.
The calculation of net asset value per ordinary share is based
on a net asset value of
GBP235,497,266 and the actual number of ordinary shares in issue
at 30 June 2014 of 238,100,000.
6. Cash and Cash Equivalents
Cash and cash equivalents comprise
the following:
30 June 2014 30 June 2013 31 December
2013
GBP GBP GBP
----------------------------------- ----------------- ----------------- --------------------
Fixed deposits of one month 16,200,000 107,600,000 50,853,621
Cash at bank 6,100,171 107,945,841 28,852,463
----------------------------------- ----------------- ----------------- --------------------
22,300,171 215,545,841 79,706,084
----------------------------------- ----------------- ----------------- --------------------
Cash and cash equivalents comprises cash held by the Group and
short term depositsheld with various banking institutions with
original maturities of three months or less. The carrying amount of
these assets approximates their fair value.
7. Loans Advanced
30 June 30 June 31 December
2014 2013 2013
GBP GBP GBP
------------------------------- ---------------- --------------------- -------------------------
UK
Maybourne Hotel Group, London 19,449,353 19,491,134 19,594,651
West End Development, London 10,141,129 - 10,140,091
Lifecare Residences,
London 12,934,260 - 11,215,462
Heron Tower,
London 16,796,796 - 18,420,006
Centre Point,
London 40,360,893 - 40,211,361
FC200, London 21,581,647 - -
Netherlands
Office 11,416,703 - -
Industrial 44,625,393 - 18,245,998
Finland
Retail Portfolio 34,492,055 - 38,553,708
211,798,229 19,491,134 156,381,277
------------------------------- ---------------- --------------------- -------------------------
No element of loans advancedare past due or impaired.For further
information and the associated risks see the Investment Manager's
Report.
The table below reconciles the movement of the carryingvalue of
loans advanced in the period.
30 June 30 June 31 December
2014 2013 2013
GBP GBP GBP
--------------- ----------------- -------------------
Loans advanced at start of the
period 156,381,277 - -
--------------------------------- --------------- ----------------- -------------------
Loans advanced 62,504,094 19,000,000 154,539,136
Loans repaid (3,956,189) - -
Arrangement fees
earned (1,152,830) (142,500) (1,674,212)
Commitment fees earned (17,495) (16,085) (16,085)
Exit fees earned (49,277) - -
Origination
fees paid 497,605 142,500 1,171,890
Origination expenses
paid - 60,999 75,413
Effective interest
earned 7,011,394 1,183,053 5,336,230
Interest payments received /
accrued (6,512,173) (736,833) (2,345,973)
Foreign exchange
losses (2,908,177) - (705,122)
Loans advanced at end of the
period 211,798,229 19,491,134 156,381,277
--------------------------------- --------------- ----------------- -------------------
Loans advanced at fair value 216,606,020 19,491,134 165,736,511
--------------------------------- --------------- ----------------- -------------------
For further information on the fair value of loans advanced,
refer to note 11.
8. Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss comprise
currency forward contracts which represent contractual obligations
to purchase domestic currency and sell foreign currency on a future
date at a specified price. The underlying instruments become
favourable (assets) or unfavourable (liabilities) as a result of
fluctuations of foreign exchange relative to their terms. The
aggregate contractual or notional amount of derivative financial
instruments, the extent to which instruments are favourable or
unfavourable, and thus the aggregate fair values of derivative
financial assets and liabilities, can fluctuate significantly from
time to time. The fair value of derivative instruments held are set
out below:
30 June 2014 Notional contract Fair values
amount 1
Assets Liabilities
GBP GBP GBP
Foreign exchange derivatives
Currency forwards 96,321,987 2,028,252 (1,634)
Total 96,321,987 2,028,252 (1,634)
30 June 2013 Notional contract Fair values
amount 1
Assets Liabilities
GBP GBP GBP
Foreign exchange derivatives
Currency forwards - - -
Total - - -
31 December 2013 Notional contract Fair values
amount 1
Assets Liabilities
GBP GBP GBP
Foreign exchange derivatives
Currency forwards 62,758,485 225,453 (138,273)
Total 62,758,485 225,453 (138,273)
1 Euro amounts translated at the period end exchange rate
9. Dividends
Dividends will be declared by the directors and paid in
compliance with the solvency test prescribed by
Guernsey law.
Subject to market conditions, the financial position of the
Company and the investment outlook, it is the directors' intention
to pay quarterly dividends to shareholders (for more information
see Chairman's Statement).
The Company paid the following dividends in the period to 30
June 2014:
Dividend Net dividend
rate per payable (GBP)
Share (pence)
Period to:
---------------- -------------------- ---------------------
31 December
2013 1.10 2,619,100
30 March 2014 1.25 2,976,250
10. Risk Management Policies and Procedures
The Group through its investment in whole loans, subordinated
loans and mezzanine loans, bridge loans, loan-on-loan financings
and other debt instruments is exposed to a variety of financial
risks, including market risk (including currency risk and interest
rate risk), credit risk and liquidity risk. The Group's overall
risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the Group's financial performance.
The directors monitor and measure the overall risk bearing
capacity in relation to the aggregate risk exposure across all risk
types and activites. Even though the risks detailed in the annual
report and financial statements for the period ended 31 December
2013 still remain appropriate, further information regarding these
risk policies are outlined below:
Market risk
Market risk includes market price risk, currency risk and
interest rate risk. If a borrower defaults on a loan and the real
estate market enters a downturn it could materially and adversely
affect the value of the collateral over which loans are secured.
However this risk is considered by the board to constitute credit
risk as it relates to the borrower defaulting on the loan and not
directly to any movements in the real estate market. As such the
directors do not consider that the Group is subject to market price
risk. The Investment Manager moderates market risk through a
careful selection of loans within specified limits. The Group's
overall market position is monitored by the Investment Manager and
is reviewed by the board of directors on an on-going basis.
Currency risk
The Group, via the subsidiaries, operates across Europe and
invests in loans that are denominated in currencies other than the
functional or presentational currency of the Company. Consequently
the Group is exposed to risks arising from foreign exchange rate
fluctuations related to currency flows from revenues and expenses
and from the translation of statement of comprehensive income and
statement of financial position items which are denominated in
foreign currencies. Exposure to foreign currency risk is monitored
by the Investment Manager on an on-going basis and is reported to
the board accordingly.
Interest rate risk
Interest rate risk is the risk that the value of financial
instruments and related income from loans advanced and cash and
cash equivalents will fluctuate due to changes in market interest
rates.
The majority of the Group's financial assets are loans advanced,
receivables and cash and cash equivalents. The Group's investments
have some exposure to interest rate risk but this is limited to
interest earned on cash deposits and floating LIBOR/EURIBOR-based
exposure for investments designated as loans advanced. Loans
advanced have been structured to include a combination of fixed and
floating interest rates to reduce the overall impact of interest
rate movements. Further protection is provided by including EURIBOR
floors, preventing interest rates from falling below certain
levels.
Credit risk
Credit risk is the risk that a counterparty will be unable to
pay amounts in full when due. The Group's main credit risk exposure
is in the loan portfolio, shown as loans advanced, where the Group
invests in whole loans and also subordinated and mezzanine debt
which rank behind senior debt for repayment in the event that a
borrower defaults. There is a reduced concentration risk as at 30
June 2014 compared to as at 31 December 2013 due to several
additional loans being in existence. There is also credit risk in
respect of other financial assets as a portion of the Group's
assets are cash and cash equivalents or accrued interest. The banks
used to hold cash and cash equivalents have been diversified to
spread the credit risk to which the Group is exposed. The total
exposure to credit risk arises from default of the counterparty and
the carrying amounts of financial assets best represent the maximum
credit risk exposure at the period end date. As at 30 June 2014,
the maximum credit risk exposure was GBP236,369,463.
The Investment Manager has adopted procedures to reduce credit
risk exposure by conducting credit analysis of the counterparties,
their business and reputation which is monitored on an on-going
basis. After the advancing of a loan a dedicated debt asset manager
employed by the Investment Adviser monitors on-going credit risk
and reports to the Investment Manager, with quarterly updates also
provided to the board. The debt asset manager routinely stresses
and analyses the profile of the Group's underlying risk in terms of
exposure to significant tenants, performance of asset management
teams and property managers against specific milestones that are
typically agreed at the time of the original loan underwriting,
forecasting headroom against covenants, reviewing market data and
forecast economic trends to benchmark borrower performance and to
assist in identifying potential future stress points. Periodic
physical inspections to assets that form part of the Group's
security are also completed in addition to monitoring the
identified capital expenditure requirements against actual borrower
investment.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its liabilities as they fall due. The Group's loans advanced
are illiquid and may be difficult or impossible to realise for cash
at short notice.
Liquidity risks arising in respect of other financial
liabilities of the Group are those due to counterparties. The Group
manages its liquidity risk through long term cash flow forecasts to
ensure it is able to meet its obligations. In addition, the Company
is permitted to borrow up to 20 per cent. of NAV and is in the
process of setting up a borrowing facility.
As at 30 June 2014, the Group had GBP22,300,171 available in
cash and GBP872,197 trade payables. The Directors considered this
to be sufficient cash available to meets the Group's liabilities,
including undrawn loan commitments.
11. Fair Value Measurement
IFRS 13 requiresthe Company to classify fair value measurements
using a fair value hierarchy that reflect the significance of the
inputs used in making the measurements. The fair value hierarchy
has the following levels:
(i) Quoted prices (unadjusted) in active markets for identical
assets or liabilities (level 1).
(ii) Inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from
prices including interest rates, yield curves, volatilities,
prepayment speeds, credit risks and default rates) or other
market corroborated inputs (level 2).
(iii) Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (level
3).
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Assets
Derivative
assets - 2,026,618 - 2,026,618
Total - 2,026,618 - 2,026,618
-------------------- ------- ----------- ------------ ------------ ---------------
There have been no transfers between levels for the period ended
30 June 2014.
The following table summarises within the fair value hierarchy
the Group's assets and liabilities (by class) not measured at
fair value at 30 June 2014 but for which fair value is disclosed:
Level Total fair Total carrying
1 Level 2 Level 3 values amount
GBP GBP GBP GBP GBP
------------------- ------- ----------- ------------ ------------ ---------------
Assets
Cash and cash
equivalents - 22,300,171 - 22,300,171 22,300,171
Other receivables
and prepayments - 244,445 - 244,445 244,445
Loans advanced - - 216,606,020 216,606,020 211,798,229
Total - 22,544,616 216,606,020 239,150,636 234,342,845
-------------------- ------- ----------- ------------ ------------ ---------------
Level Level 2 Level 3 Total fair Total carrying
1 values amount
GBP GBP GBP GBP GBP
------------------- ------- ----------- ------------ ------------ ---------------
Liabilities
Trade and other
payables - 872,197 - 872,197 872,197
Total - 872,197 - 872,197 872,197
-------------------- ------- ----------- ------------ ------------ ---------------
The carrying values of the assets and liabilities included in
the above table are considered to approximate their fair values,
except for loans advanced. The fair value of loans advanced has
been determined by discounting the expected cash flows using a
discounted cash flow model.
Cash and cash equivalents include cash in hand and fixed
deposits held with banks. Other receivables and prepayments include
the contractual amounts and obligations due to the Group and
consideration for advance payments made by the Group. Trade and
other payables represent the contractual amounts and obligations
due by the Group for contractual payments.
12. Taxation
The Company is exempt from Guernsey taxation under the Income
Tax (Exempt Bodies) (Guernsey) Ordinance 1989 for which it pays an
annual fee of GBP600.
The Luxembourg indirect subsidiary of the Company is subject to
the applicable tax regulations in Luxembourg, as it is incorporated
under the securitization Law of 22 March 2004.
13. Related Party Transactions
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
Fees, expenses and other payments
Outstanding at For the period ended
30 June 2014 30 June 2014
GBP GBP
--------------------------- --------------- ---------------------
Directors' fees and
expenses paid
Stephen Smith - 22,500
John Whittle - 17,500
Jonathan Bridel - 16,250
Expenses paid - 1,679
Investment Manager
Investment management
fees earned 355,021 636,764
Origination fees
earned - 497,605
Expenses 6,000 6,000
StarConsult S.à.r.l
1
Administrative
services 2,449 5,412
1 StarConsult S.à.r.l is a company managed by Thierry
Drinka, who is also a director of Luxco.
Shareholdings and dividends paid
Dividends paid As at 30 June 2014
GBP Number of shares
--------------------------- --------------- ---------------------
Starwood Property
Trust Inc 214,790 9,140,000
SCG Starfin Investor
LP 53,698 2,285,000
Stephen Smith 940 40,000
John Whittle 165 7,000
Jonathan Bridel 165 7,000
---------------------------- --------------- ---------------------
Other
The Group participated in a number of loans in the period in
which Starwood Property Trust, Inc. acted as a co--lender.
The Group participated in one loan (Industrial Portfolio,
Netherlands) in the period in which Starfin European Debt TC, L.P.
acted as a co-lender.
Starwood Capital Europe Advisers LLP also act as Investment
Adviser to Starfin GP Limited, the General Partner of Starfin
European Debt TC L.P. For the period ended 30 June 2014 there were
no transactions between the Group and Starfin European Debt TC
L.P.
14. Commitments
The Company and the GP (acting in its capacityas General Partner
of the Partnership) entered into a loan agreement ("the loan")
dated 17 December 2012 committing the principal amount of
GBP223,930,000 to the Partnership. The arrangement is based on the
understanding that the commitment will be used primarily to fund
the advancing of loans, and as such the commitment will only be
drawn down once loans have been approved for issue by the
Investment Manager.
As at 30 June 2014 GBP198,976,017 had been drawn by the GP
(acting in its capacity as General Partner of the Partnership under
the loan agreement).
As at 30 June 2014 the Company had outstanding commitments in
respect of loans not fully drawn of GBP6,792,510.
As at 30 June 2014 the Company had outstanding commitments in
respect of the forward contracts entered into under the Hedging
Master Agreement of EUR120,282,201 (GBP96,321,987 translated at the
period end exchange rate).
15. Events after the reporting period
The Group announced on 15 July 2014 that it has provided EUR 25
million out of a total of EUR 99 million for the refinancing and
refurbishment of a new W branded hotel located in the centre of
Amsterdam. To date the Group has funded advances of EUR 9,650,924.
Starwood Propery Trust, Inc and Starfin European Debt TC, LP acted
as co-lenders on this loan.
On 21 July 2014 and 24 July 2014, the Group received
amortisation of GBP 770,360 and EUR 1,297,907 from its Heron and
Tradeka loans respectively.
On 22 July 2014, the Group made a follow on investment of GBP
403,550 in FC200.
On 23 July 2014, the Group declared a dividend of 1.35 pence per
share which was paid on 23 August 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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