UK residential property firm Home REIT said on Thursday that it has finalised an additional £130 mln (€153 mln) interest-only debt facility with Scottish Widows.
This new facility has been secured on a 15-year term with a low fixed all-in rate of 2.53% per annum for the duration of the facility. The margin charged on this facility is five basis points lower than that of the company’s existing £120 mln facility, also with Scottish Widows. When the new facility is drawn, this competitive rate will be highly accretive to the Company's average net initial property yield, while mitigating potential interest rate risk for the 15-year period, the company said in a statement.
The company is targeting a conservative level of gearing, with a maximum level of aggregate borrowings of 35% of the company's gross assets at the time of drawdown of the relevant borrowings. The company reiterates its minimum targeted annual dividend of 5.5% per Ordinary Share from the financial period commencing 1 September 2021 and a targeted NAV total return of a minimum of 7.5% per annum over the medium term.
Gareth Jones, partner at Alvarium Home REIT Advisors, said: 'Scottish Widows’ decision to provide Home REIT with further funding is a strong endorsement of our strategy and will be instrumental in supporting our growth ambitions as well as our purpose of helping to alleviate homelessness in the UK. Our acquisitions programme remains on track and we continue to focus on deploying the remaining proceeds of the recently oversubscribed equity placing.'
