UK real estate firm Development Securities announced on Wednesday that it has acquired a senior loan secured against a neighbourhood shopping centre in south-west England 'at a significant discount'.
UK real estate firm Development Securities announced on Wednesday that it has acquired a senior loan secured against a neighbourhood shopping centre in south-west England 'at a significant discount'.
Working in conjunction with UK property investment manager Ellandi, Development Securities invested £10 mln (EUR 11.8 mln) to acquire 100% of the loan from a UK high-street banking group.
The loan is performing and interest payments are being met by the borrower in full. Development Securities said it would initially receive a yield in excess of 10% per annum in relation to the investment. The acquisition was financed out of the proceeds of Development Securities' equity fund raising, completed in July 2009.
The unnamed bank decided to sell the loan because of a breach of the loan-to-value covenant. Development Securities said it considered the loan to be well secured, adding it offered numerous potential management options given the discounted purchase price.
Ellandi specialises in acquiring property related debt, recapitalising distressed property situations and investing in direct real estate.
