Schroder European Real Estate Investment Trust has capacity of up to €70 mln to invest in the growth cities and regions across the Continent after securing two new debt facilities in Germany from pbb Deutsche Pfandbrief Bank.
The loans, totalling €30.5 mln, were granted at a blended fixed interest rate of 1.1%.
The first loan of €16.5 mln is for a term of 10 years and is secured against the two retail assets acquired earlier in the year in Berlin and Frankfurt. The loan is interest only and represents a loan to value (LTV) of 46%, with a fixed rate of 1.31% per annum.
The second €14 mln loan is secured against the two office buildings owned in Stuttgart and Hamburg. The volume represents an LTV of 48%. This loan is also interest only, but has a term of seven years and a fixed rate of 0.85% per annum.
Combined with the €18.2 mln loan recently announced against the Casino retail assets in France, Schroder EREIT now has total outstanding debt of €48.7 mln across three facilities, representing an LTV of 24% against the overall gross asset value of the company's portfolio. The current blended all-in interest rate is 1.19%, substantially below the portfolio net initial yield against purchase price of 5.6% per annum.
Non-executive chairman Julian Berney commented: 'We have assembled a high-quality property portfolio through the full deployment of the company’s initial equity and the income return from these assets will be enhanced by the very attractive financing rates we have been able to secure.
'The company’s overall gearing strategy is to apply debt against those assets where it is most accretive to returns, whilst maintaining the the maximum gearing cap of 35% LTV at the portfolio level and having a variety of loan maturities and debt facilities, to provide maximum flexibility. The loans we have put in place to date successfully achieve this.'
