THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE
REGULATION EU 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO US
PERSONS OR INTO OR WITHIN THE UNITED STATES, AUSTRALIA, CANADA OR
JAPAN, OR ANY OTHER JURISDICTION WHERE, OR TO ANY OTHER PERSON TO
WHOM, TO DO SO WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN
DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE, OR
ANY SOLICITATION OF ANY OFFER TO PURCHASE, SUBSCRIBE FOR OR
OTHERWISE ACQUIRE, ANY INVESTMENTS IN ANY JURISDICTION.
Starwood
European
Real
Estate
Finance
Limited
Portfolio
Update
Update on
Office Portfolio, Ireland
Starwood European Real Estate Finance Limited (the “Company” or “SWEF”)
provides an update on the loan investment called Office Portfolio,
Ireland.
On 2 January 2020 SWEF committed
to a €35.2 million mezzanine loan secured on a portfolio of 12
properties in Central Dublin, an investment which equated to 7.0
per cent of NAV as of 31 December 2019. The successful sale of some assets in 2021
and 2022 reduced the balance of the loan and as of 30 September
2024 the remaining balance (including accrued interest) is €25.9
million secured against a remaining portfolio of seven properties.
As of 31 August 2024, the loan represents approximately 10.6 per
cent of the Company’s Net Asset Value (“NAV”). The loan has remained in compliance with its
covenants but was re-classified as a Stage-2 loan (significant
increase in credit risk since initial recognition) in the first
half of 2023.
In the Q2 2024 Quarterly
Portfolio Update, released on 24 July 2024, the Company provided the
following update on the loan:
“The underlying assets
comprise seven well located European city centre CBD buildings and
are well tenanted, albeit certain assets are expected to require
capital expenditure to upgrade to Grade-A quality to retain
existing tenants upon future lease expiry events. The loan remains
in compliance of its third-party senior loan facility and the
Group’s mezzanine loan facility, however given the persisting
challenging market dynamics, the Group is working closely with the
sponsor, a very large institutional asset manager, and a leading
global valuation and advisory firm to identify future capital
expenditure needs, funding sources, exit values and the business
plan to exit”.
Since then, the sponsor of the
loan has provided new
operational updates and the Board has evaluated various business
plan scenarios and the uncertainty related to these scenarios. As a
consequence of this new information, combined with the challenging
local office market dynamics, the Board has determined to provide
for a 50 per cent impairment of the Company’s loan, equivalent to
€12.9 million. Nevertheless, the Board and the Investment Adviser
consider that there are a wide range of possible outcomes whereby
the loan may have a lesser or greater degree of recovery due to the
ongoing uncertainty related to the various business plan scenarios.
The Investment Adviser will be actively managing the position to
maximise the opportunity for value recovery. The Company looks
forward to providing further updates as appropriate and when
practically available.
As of 31 August 2024, the
Company’s NAV was £203.7 million and NAV per share was 105.02
pence. After adjusting for the impairment of the Office Portfolio,
Ireland loan, the adjusted NAV is £192.8 million and adjusted NAV
per share is 99.43 pence as of 31 August 2024.
The Company is currently
finalising its third quarter Quarterly Portfolio Update, which is
expected to be published later this month. To date, the Company has
returned £210 million to shareholders in Compulsory Redemptions in
accordance with its orderly realisation strategy adopted on 27
January 2023. This is equivalent to 50.8 per cent of NAV as of 31
January 2023.
For further information, please contact:
Apex
Fund and Corporate Services
(Guernsey)
Limited as Company
Secretary
Duke Le Prevost
T: +44 (0) 203 5303
630
E:
Starwood@apexgroup.com
Jefferies
International Limited
Gaudi Le
Roux
Harry
Randall
Ollie
Nott
T: +44 (0) 20 7029
8000
The person responsible for
arranging the release of this information on behalf of the Company
is Duke Le Prevost.
A copy of this
announcement can be found on the Company’s webiste:
www.starwoodeuropeanfinance.com.
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
conduct an orderly realisation of the assets of the Company.
www.starwoodeuropeanfinance.com.
The Group's assets are managed by
Starwood European Finance Partners Limited, an indirect
wholly-owned subsidiary of the Starwood Capital Group.
Information
regarding forward-looking statements
This announcement contains (or
may contain) statements that are, or may be deemed to be,
‘‘forward-looking statements’’. Forward-looking statements are
based on current expectations and projections about future events
and other matters that are not historical fact. These
forward-looking statements are sometimes identified by the use of a
date in the future or forward-looking terminology, including, but
not limited to, the words “consider” ‘‘aim’’, ‘‘anticipate’’,
‘‘believe’’, ‘‘intend’’, ‘‘plan’’, ‘‘estimate’’, ‘‘expect’’,
‘‘may’’, ‘‘target’’, ‘‘project’’, ‘‘will’’, ‘‘could’’ or ‘‘should’’
or, in each case, their negative or other variations or words of
similar meaning. These forward-looking statements include matters
that are not historical facts and include statements that reflect
intentions, beliefs and current expectations. By their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future or are beyond the Company’s control. They
are not guarantees of future value or performance and are based on
one or more assumptions.
Forward-looking statements
contained in this announcement apply only as at the date of this
announcement. Subject to any obligations under the UK Listing Rules
and FCA’s Disclosure Guidance and Transparency Rules, the UK
version of the Market Abuse Regulation or any other applicable law
or regulation, the Company undertakes no obligation publicly to
update or review any forward-looking statement, whether as a result
of new information, future developments or otherwise.