TIDMSWEF
RNS Number : 1919U
Starwood European Real Estate Finan
28 July 2015
28 July 2015
Starwood European Real Estate Finance Limited: Quarterly
Factsheet Publication
Starwood European Real Estate Finance Limited (the "Company")
announces that the factsheet for the first quarter ended on 30 June
2015 is available at:
www.starwoodeuropeanfinance.com
Extracted text of the commentary is set out below:
"Investment portfolio
As at 30 June 2015 the Group had investments and commitments of
GBP247.3 million (sterling equivalent at quarter end exchange
rates) as follows:
Balance as Unfunded
at 30 June Commitments
2015
------------------------ ------------ -------------
Maybourne Hotel Group, GBP11.2 m -
London
------------------------ ------------ -------------
West End Development, GBP10.0 m -
London
------------------------ ------------ -------------
Lifecare Residences, GBP13.7 m GBP0.8
London m
------------------------ ------------ -------------
Heron Tower, London GBP13.3 m -
------------------------ ------------ -------------
Centre Point, London GBP45.0 m -
------------------------ ------------ -------------
5 Star Hotel, London GBP6.9 m -
------------------------ ------------ -------------
Aldgate Tower, London GBP38.9 m GBP6.1
m
------------------------ ------------ -------------
Total Sterling Loans GBP139.0 GBP6.9m
m
------------------------ ------------ -------------
Retail Portfolio, EUR37.1 m -
Finland
------------------------ ------------ -------------
Industrial Portfolio, EUR20.0 m -
Netherlands
------------------------ ------------ -------------
Office, Netherlands EUR14.1 m -
------------------------ ------------ -------------
EUR8.2
W Hotel, Netherlands EUR16.8 m m
------------------------ ------------ -------------
EUR8.2
Total Euro Loans EUR88.0 m m
------------------------ ------------ -------------
Industrial Portfolio, Kr 295.0 Kr 55.3
Denmark m m
------------------------ ------------ -------------
Total Danish Krona Kr 295.0 Kr 55.3
Loan m m
------------------------ ------------ -------------
Portfolio Activity
The following significant activity occurred in the second
quarter of 2015.
FC200 Repayment: On 11 June 2015 the FC200 loan of GBP10.1
million was repaid following a sale of the property.
Danish Industrial Portfolio: On 26 June 2015, the Company
committed to provide two facilities for a total of DKK 350.3
million (c. GBP33.5 million) for a portfolio of light industrial
assets throughout Denmark. The first facility is a mezzanine
facility to refinance a portfolio already owned by the sponsor. The
second facility is a whole loan to support the acquisition of a new
portfolio. The facilities were partially drawn on 26 June 2015,
with a further drawdown made on 15 July 2015 and the loan is
expected to be fully drawn during August.
The Company had GBP2.6 million of cash at 30 June 2015 with GBP8
million drawn on the revolving credit facility.
The following activity occurred after 30 June 2015 and up to the
date of publication of this fact sheet on 28 July 2015.
Irish Portfolio: On 21 July 2015, the Company committed to
provide a EUR6.1 million loan on a portfolio of retail and
residential rental properties in the Republic of Ireland. The loan
is expected to be drawn before the end of July 2015.
5 Star Hotel, London: On 24 July 2015, the Company committed to
increase its existing loan to the 5 Star London Hotel by GBP6.2
million. The loan is expected to be drawn before the end of July
2015.
All of the loans closed over the last month reflect the
Company's typical risk/return approach and meet its stated
investment strategy. The drawn amount on the credit facility also
provides a good level of investment cover for repayment risks.
In order to raise funds to meet this pipeline, on 20 July 2015
the Company announced it would be making a tap issue for an amount
up to GBP15 million. The tap was subsequently extended and the
Company issued 23,780,000 Ordinary Shares at a price of 103 pence,
raising gross proceeds of GBP24.49 million. The issue was
oversubscribed at this level and represented the entire amount that
the Company could issue without first publishing a prospectus.
Pipeline
It is expected that some of the loans originated early in the
life of the Company may repay over the coming year and the Company
is continuously focussed on the need to promptly re-invest any
repayment proceeds to avoid material cash drag.
The Company has a strong pipeline and currently has GBP44.8
million of loans in execution which it expects to close in the
coming weeks.
Going into the second half of the year the Company's investment
pipeline remains robust. We continue to see a variety of
opportunities which will allow the Company to achieve good risk
adjusted returns from whole loans as well as mezzanine loans.
In the past quarter we have closed loans in Denmark and Ireland
which are two new jurisdictions for the Company. There has been a
significant investment of origination effort in Ireland in
particular, which, as a result, features strongly in the current
pipeline.
There has also continued to be a significant investment of time
in Spain and Italy and we would expect to close our first loan in
the region in the second half of the year.
Another growing theme for the Company has been assisting
borrowers whose loans are with lenders that have exited the lending
market or lenders who have sold loan portfolios to private equity
or hedge funds. Examples include a number of borrowers in
Scandinavia with performing loans from international lenders who
are unable to roll those loans due to these lenders pulling out of
the region to their home markets. There are also many opportunities
arising from non-performing loan (NPL) books that banks have sold.
The owners of these NPLs have often bought the NPL at a price that
allows them to offer a significant discount to the borrower that
allows the borrower to refinance at an appropriate new level with a
new lender. These situations are often complex and therefore can
create opportunities for the Company to achieve good risk adjusted
returns. Initially many of the NPL opportunities have been in the
UK and Ireland, however we would expect that to widen if banks
continue to divest loan portfolios in other jurisdictions.
Placing Program
The Company's policy is only to raise equity capital for
immediate or imminent deployment, in order to minimise cash
drag.
As outlined above, the Company's pipeline of investments under
review is of a size that the Board is also considering publishing a
prospectus in order to implement a 12 month placing programme. This
would allow the Company to raise additional equity capital as
needed for making further investments.
Dividend and Future Policy
On 24 July 2015 the Directors declared a dividend of 1.75 pence
per Ordinary Share (annualised 7.0 pence per Ordinary Share) in
relation to the second quarter of 2015.
The Company is encouraged to note that market activity is
growing, but is alert to the increased competition amongst lenders
that improving conditions has stimulated. In the medium term the
increased competition amongst lenders will lead to a choice of
assuming greater risk or accepting slightly lower returns; the
Company would always weight more to lower return than higher risk,
with a resulting impact on dividends. In the short term, and on the
basis of the current portfolio, the Company continues to target a
dividend at an annualised rate of 7.0 pence per Ordinary Share.
Whilst it is difficult to predict the timing of any changes in the
returns from new investments, the Company considers that the
previous targeted dividend rate may not be sustainable in the
longer term without increasing the risk profile of the portfolio
and, accordingly, the Company believes the 2016 onwards dividend
target should be set 0.5 pence lower at 6.5 pence per Ordinary
Share.
The above target dividend payments should not be taken as a
forecast of the Company's future performance, profits or results.
The target dividend payments are targets only and there is no
guarantee whatsoever that they can or will be achieved and they
should not be seen as an indication of the Company's actual return.
Target dividend payments are dependent on a number of factors,
including in particular: interest rate movements, the pace of
unscheduled amortisation or prepayment, the pace of drawdowns by
borrowers of unfunded commitments, and the pace of reinvestment of
cash receipts and the level of return on such reinvestment together
with general economic and market conditions and exchange rate
movements. Accordingly, investors should not place any reliance on
the target dividend payments in deciding whether to subscribe for
Placing Shares or invest in the Ordinary Shares. Cash receipts may
be applied to the payment of dividends before they are fully
recognised in the Company's income statement.
Key Portfolio Statistics at 30 June 2015
Number of investments 12
------------------------- -------
Percentage of currently
invested portfolio
in floating rate
loans (1) 50.3%
------------------------- -------
Invested Loan Portfolio
annualised total
return (2) 8.8%
------------------------- -------
Weighted average
portfolio LTV - to
Group first GBP (3) 14.2%
------------------------- -------
Weighted average
portfolio LTV - to
Group last GBP (3) 63.2%
------------------------- -------
Average loan term 3.6
years
------------------------- -------
Percentage of NAV
in cash 1.1%
------------------------- -------
Percentage of NAV
drawn on revolving
credit facility -3.4%
------------------------- -------
Percentage of NAV
invested in senior
and whole loans (1) 70.5%
------------------------- -------
Percentage of NAV
invested in second
lien and mezzanine
loans (1) 24.9%
------------------------- -------
Percentage of NAV
invested in other
debt instruments
(1) 5.6%
------------------------- -------
Percentage of loans
in GBP (1) 57.9%
------------------------- -------
Percentage of loans
in Euro (1) 30.4%
------------------------- -------
Percentage of loans
in Danish Krona 11.7%
------------------------- -------
(1) Calculated on loans currently drawn (as shown on page 1)
using the exchange rates applicable when the loans were funded.
(2) Calculated on amounts currently outstanding, excluding
undrawn commitments, and assuming all currently drawn loans are
outstanding for the full contractual term. Eight of the loans are
floating rate (partially or in whole and some with floors) and
returns are based on an assumed profile for future LIBOR, EURIBOR
or CIBOR but the actual rate received may be higher or lower.
Calculated only on amounts funded to date and excluding committed
amounts and cash uninvested. The calculation excludes the
origination fee payable to the Investment Manager.
(3) LTV to Group last GBP means the percentage which the total
loan commitment less any amortisation received to date (when
aggregated with any other indebtedness ranking alongside and/or
senior to it) bears to the market value determined by the last
formal lender valuation received by the date of publication of this
factsheet. LTV to first Group GBP means the starting point of the
loan to value range of the loan commitments (when aggregated with
any other indebtedness ranking senior to it). For Lifecare, W Hotel
and Centre Point the calculation includes the total facility
available and is calculated against the market value on completion
of the project. For Aldgate, the calculation includes the total
facility available against the stabilised value of the property.
"
For further information, please contact:
Robert Peel
Dexion Capital plc
T: +44 20 7832 0900
Ipes (Guernsey) Limited
Gillian Newton
T: +44 1481 735869
Notes:
Starwood European Real Estate Finance is an investment company
listed on the main market of the London Stock Exchange with an
investment objective to provide 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 in the UK and
Continental European markets. www.starwoodeuropeanfinance.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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