SWEF: Quarterly Factsheet Publication
24 Janvier 2017 - 8:01AM
UK Regulatory
Dow Jones received a payment from EQS/DGAP to publish this press
release.
Starwood European Real Estate Finance Ltd (SWEF)
SWEF: Quarterly Factsheet Publication
24-Jan-2017 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
*24 January 2017*
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, TO U.S. PERSONS OR IN, INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN, NEW ZEALAND OR ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
*Starwood European Real Estate Finance Limited: Quarterly Factsheet
Publication*
Starwood European Real Estate Finance Limited (the 'Company') announces that
the factsheet for the fourth quarter ended on 31 December 2016 is available
at:
www.starwoodeuropeanfinance.com [1]
Extracted text of the commentary is set out below:
'*Investment Portfolio at 31 December 2016
*As at 31 December 2016, the Group had 16 investments and commitments of
GBP363.4 million as follows:
+-----------------------+------------------+-------------------+
|*Transaction* |*Sterling |*Sterling |
| |equivalent balance|equivalent unfunded|
| |(1)* |commitment (1)* |
+-----------------------+------------------+-------------------+
|Centre Point, London |GBP45.0m |- |
+-----------------------+------------------+-------------------+
|5 Star Hotel, London |GBP13.0m |- |
+-----------------------+------------------+-------------------+
|Center Parcs Bonds, UK |GBP9.5m |- |
+-----------------------+------------------+-------------------+
|Industrial Portfolio, |GBP31.8m |- |
|UK | | |
+-----------------------+------------------+-------------------+
|Hospitals, UK |GBP25.0m |- |
+-----------------------+------------------+-------------------+
|Hotel, Channel Islands |GBP26.9m |- |
+-----------------------+------------------+-------------------+
|Varde Partners mixed |GBP24.6m |- |
|portfolio, UK | | |
+-----------------------+------------------+-------------------+
|Mixed use development, |GBP8.1m |GBP6.9m |
|South East UK | | |
+-----------------------+------------------+-------------------+
|Regional Budget Hotel |GBP75.0m |- |
|Portfolio, UK | | |
+-----------------------+------------------+-------------------+
|*Total Sterling Loans* |*GBP258.9m* |*GBP6.9m* |
+-----------------------+------------------+-------------------+
|Industrial Portfolio, |GBP22.3m |- |
|Netherlands | | |
+-----------------------+------------------+-------------------+
|Office, Netherlands |GBP11.9m |- |
+-----------------------+------------------+-------------------+
|Retail & Residential |GBP3.4m |- |
|Portfolio, Ireland | | |
+-----------------------+------------------+-------------------+
|Residential Portfolio, |GBP5.2m |- |
|Cork, Ireland | | |
+-----------------------+------------------+-------------------+
|Residential Portfolio, |GBP6.7m |- |
|Dublin, Ireland | | |
+-----------------------+------------------+-------------------+
|Logistics, Dublin, |GBP12.8m |- |
|Ireland | | |
+-----------------------+------------------+-------------------+
|*Total Euro Loans* |*GBP62.3m* |*GBP0.0m* |
+-----------------------+------------------+-------------------+
|Industrial Portfolio, |GBP35.3m |- |
|Denmark, | | |
+-----------------------+------------------+-------------------+
|*Total Danish Krona |*GBP35.3m* |- |
|Loans* | | |
+-----------------------+------------------+-------------------+
|*Total Portfolio* |*GBP356.5m* |*GBP6.9m* |
+-----------------------+------------------+-------------------+
(1) Euro and Danish Krona balances translated to sterling at 31 December
2016 exchange rates.
*Dividend*
On 23 January 2017 the Directors declared a dividend of 1.625 pence per
Ordinary Share (annualised 6.5 pence per Ordinary Share) in relation to the
fourth quarter of 2016.
*Revolving Credit Facility
*During the quarter the Group extended the GBP60 million revolving credit
facility from the existing maturity of 4 December 2016 to 31 March 2017. The
Group is looking to restructure and extend this facility during the first
quarter of 2017 to reflect the increased NAV of the Group.
*Portfolio Commentary
*2016 was the most successful origination year in the Group's history, with
GBP170.8m of new lending extended to borrowers. As was to be expected, 2016
was also a big year for repayments by the Group's borrowers, and so the net
position showed relatively modest growth in the overall loan book. The table
below shows the Group's loan origination and repayment profile over the last
four years.
+-------------------------+---------+--------+--------+--------+
| |*2013* |*2014* |*2015* |*2016* |
+-------------------------+---------+--------+--------+--------+
|New loans to borrowers |GBP135.5m |GBP117.3m |GBP146.9m |GBP170.8m |
|(amount drawn) | | | | |
+-------------------------+---------+--------+--------+--------+
|Loan repayments and |- |-GBP48.8m |-GBP63.5m |-GBP129.3m|
|amortisation | | | | |
+-------------------------+---------+--------+--------+--------+
|*Net Investment* |*GBP135.5m*|*GBP68.4m*|*GBP83.4m*|*GBP41.5m*|
+-------------------------+---------+--------+--------+--------+
As at 31 December, the average maturity of the Group's GBP356.5 million loan
book was 3.3 years with GBP31.0 million of cash and substantial liquidity
lines of GBP60.0 million available to use for new investments. The gross
annualised total return of the invested loan portfolio is an attractive 8.5
per cent.
Since the launch of the Group at the end of 2012, origination activity has
always been more challenging during the first few months of any given year.
Having said this, the transaction pipeline continues to evolve and we are
seeing a variety of opportunities which will allow the Group to achieve good
risk adjusted returns from whole and mezzanine loans.
The Investment Adviser is in advanced discussions on a number of
opportunities with heads of terms expected to be signed shortly and moving
into execution in the coming weeks. The transactions cover both the UK and
Continental Europe with a number of diverse sectors being explored from
office and retail to datacentres and education and would, if they proceed,
allow the Group to deploy the available cash and draw down on the revolving
credit facility as required.
All opportunities remain, however, subject to final due diligence,
documentation and Investment Manager Board approval.
The strategy to grow the overall size of the Company by equity issuance and
to grow the loan book accordingly will continue to be approached with a view
to minimising cash drag from any potential repayments and utilising the
revolving credit facility where appropriate. This was successfully managed
during 2016 when notwithstanding that GBP129.3 million of the Group's loan
book was repaid, these repayments were substantially reinvested alongside
the GBP71.5 million of net proceeds raised in the same period.
We anticipate that during 2017 we will build on the successes of 2016 and
enter the year optimistic about the prospects and opportunities available to
the Group.
*Market Commentary
* In our September factsheet commentary we highlighted some expected
consequences for the UK market in light of the uncertainties created by the
Brexit vote. In particular we noted a tendency for decreased transaction
volumes and an increased caution in the mainstream commercial real estate
lending market in the UK. We can now see these themes coming through in the
market data.
UK total commercial real estate transaction volumes are down by 27.7 per
cent from GBP71 billion to GBP51.3 billion for 2016 versus 2015 according to
Property Data. Lending volumes are typically made up approximately equally
between refinancing and acquisition financing so, as a consequence of lower
transaction volumes, lending activity volumes are also down.
According to the latest information available from the De Montfort
commercial real estate lending survey, UK commercial real estate lending
volumes were down by 13.7 per cent from GBP24.8 billion to GBP21.4 billion
between the first half of 2015 and the first half of 2016. The latest survey
by Laxfield Capital shows this trend continuing with financing request
volumes for the half comprising quarters two and three of 2016 down by 27.2
per cent compared to previous period.
Despite the decreased market activity in the UK as a whole in 2016, the
Group was able to continue to achieve a strong level of new lending as the
Group benefitted from a combination of its flexible mandate and improved
lending market terms, while applying a consistent approach to underwriting
risk on a case by case basis,.
In addition to a reduction in lending volumes, the data is also showing
changes in general lending terms. The Laxfield survey highlights that
average pricing expectations are up by 24bps for investment financing and
62bps for development financing compared to the previous period while the De
Montfort report indicates that the average maximum senior debt LTV provided
by respondents reduced from 65 per cent to 59 percent between year-end 2015
and end of the first half of 2016.
Post the Brexit referendum, economic news has generally been more positive
than experts had predicted and some sectors are receiving a boost from the
weaker pound. According to Credit Suisse's hospitality research, the UK
hotel market is likely to benefit from an increase in demand both from
international visitors and 'staycationers' in 2017 as a result of the
depreciation in the pound against most currencies. Historically, there is a
correlation between net outbound travel from the UK to Europe and the
GBP/EUR exchange rate with the highest correlation when the exchange rate
data is lagged by 9 months. This means that this impact should be most
clearly felt in the middle of 2017. However, the longer term effects of
Brexit remain unclear and the Group will continue to be vigilant on the many
risks which may result.
With the combination of these uncertainties and a more conservative
mainstream lending environment, we do expect the Group to continue to
benefit from the opportunities such an environment presents and achieve good
risk adjusted returns.
Outside of the UK we continue to place a particular focus on Ireland and
Spain as two of the markets with the best potential opportunities for the
Group. In addition, we are also seeing an increasing number of potentially
interesting lending opportunities in the central and eastern European
markets.
In terms of asset classes, we are seeing an increased interest from
investors in alternative asset classes outside of the traditional mainstream
real estate sectors of office, retail and logistics, with purchasers looking
for opportunities in hospitality, education, healthcare and datacentres. The
Group is well positioned to capitalise on these lending opportunities given
the Investment Advisor's wide experience across the real estate spectrum.
*Share Price / NAV at 31 December 2016
*
+-------------------+-----------+
|Share price (p) |109.00 |
+-------------------+-----------+
|NAV (p) |101.58 |
+-------------------+-----------+
|Premium/ (discount)|7.3% |
+-------------------+-----------+
|Issued shares |375,019,398|
+-------------------+-----------+
|Market cap |GBP408.8m |
+-------------------+-----------+
*Key Portfolio Statistics at 31 December 2016
*
+----------------------------------------------------+---------+
|Number of investments |16 |
+----------------------------------------------------+---------+
|Percentage of currently invested portfolio in |67.3% |
|floating rate loans (1) | |
+----------------------------------------------------+---------+
|Invested Loan Portfolio annualised total return (2) |8.5% |
+----------------------------------------------------+---------+
|Weighted average portfolio LTV - to Group first GBP |26.7% |
|(3) | |
+----------------------------------------------------+---------+
|Weighted average portfolio LTV - to Group last GBP (3)|66.0% |
+----------------------------------------------------+---------+
|Average loan term (stated maturity at inception) |4.7 years|
+----------------------------------------------------+---------+
|Average remaining loan term |3.3 years|
+----------------------------------------------------+---------+
|Net Asset Value |GBP381.0m |
+----------------------------------------------------+---------+
|Amount drawn under Revolving Credit Facility |GBP0.0m |
|(excluding accrued interest) | |
+----------------------------------------------------+---------+
|Portfolio value (including accrued income) |GBP359.9m |
+----------------------------------------------------+---------+
|Cash |GBP31.0m |
+----------------------------------------------------+---------+
|Other net assets/ (liabilities) (including hedges) |-GBP9.9m |
+----------------------------------------------------+---------+
| | |
+----------------------------------------------------+---------+
(1) Calculated on loans currently drawn 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. Twelve of the loans are floating rate (partially or
in whole and some with floors) and returns are based on an assumed profile
for future interbank rates but the actual rate received may be higher or
lower. Calculated only on amounts funded to date and excluding committed
amounts and cash un-invested. 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 Centre Point and the mixed use
development, south east UK, the calculation includes the total facility
available and is calculated against the market value on completion of the
project.
+-------------------------+---------------+--------------------+
|*Remaining years to |*Value of |*% of invested |
|contractual maturity** |loans* |portfolio* |
+-------------------------+---------------+--------------------+
|0 to 1 years |GBP51.0m |14.3% |
+-------------------------+---------------+--------------------+
|1 to 2 years |GBP61.0m |17.1% |
+-------------------------+---------------+--------------------+
|2 to 3 years |GBP88.6m |24.9% |
+-------------------------+---------------+--------------------+
|3 to 5 years |GBP130.9m |36.7% |
+-------------------------+---------------+--------------------+
|5 to 10 years |GBP25.0m |7.0% |
+-------------------------+---------------+--------------------+
_*excludes any permitted extensions. Note that borrowers may elect to repay
loans before contractual maturity.
_
+---------------------+----------------------+
|*Country* |*% of invested assets*|
+---------------------+----------------------+
|UK - Regional England|52.1 |
+---------------------+----------------------+
|UK - Central London |15.0 |
+---------------------+----------------------+
|Netherlands |9.3 |
+---------------------+----------------------+
|Ireland |7.3 |
+---------------------+----------------------+
|Denmark |8.5 |
+---------------------+----------------------+
|Channel Islands |7.8 |
+---------------------+----------------------+
+--------------------+----------------------+
|*Sector* |*% of invested assets*|
+--------------------+----------------------+
|Hospitality |36.4 |
+--------------------+----------------------+
|Light Industrial |24.9 |
+--------------------+----------------------+
|Residential for sale|12.0 |
+--------------------+----------------------+
|Retail |7.5 |
+--------------------+----------------------+
|Healthcare |7.2 |
+--------------------+----------------------+
|Residential for rent|3.8 |
+--------------------+----------------------+
|Office |4.5 |
+--------------------+----------------------+
|Logistics |3.4 |
+--------------------+----------------------+
|Other |0.3 |
+--------------------+----------------------+
+-----------+----------------------+
|*Loan type*|*% of invested assets*|
+-----------+----------------------+
|Whole loans|47.6 |
+-----------+----------------------+
|Mezzanine |52.4 |
+-----------+----------------------+
+------------+----------------------+
|*Loan type* |*% of invested assets*|
+------------+----------------------+
|Sterling |74.9 |
+------------+----------------------+
|Euro |16.6 |
+------------+----------------------+
|Danish Krona|8.5' |
+------------+----------------------+
For further information, please contact:
Robert Peel
Fidante Capital
T: +44 20 7832 0900
Duncan MacPherson
Starwood Capital
T +44 207 016 3655
*
Notes:
*
Starwood European Real Estate Finance Limited 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 the wider European Union's internal
market. www.starwoodeuropeanfinance.com [1].
The Group is the largest London-listed vehicle to provide investors with
pure play exposure to real estate lending.
The Group's assets are managed by Starwood European Finance Partners
Limited, an indirect wholly-owned subsidiary of the Starwood Capital Group.
Language: English
ISIN: GG00B79WC100
Category Code: MSCM
TIDM: SWEF
Sequence No.: 3782
End of Announcement EQS News Service
538497 24-Jan-2017
1: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=b14fd12a9d67a041cd95eabce5bcab5f&application_id=538497&site_id=vwd_london&application_name=news
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