Valad completes EUR 1.1b debt refinancing of Duke

Valad, the European multi-let real estate investment manager, has completed a EUR 1.1 bn (£950 million) refinancing of DUKE, its real estate joint venture with Lloyds Banking Group. This extends the term of the debt facilities to December 2016.

The Diversified UK and European (DUKE) portfolio is a 50/50 joint venture between Valad Europe and Lloyds Banking Group created in July 2009, initially for a three-year term. The portfolio comprises more than 100 multi-let office, industrial and retail properties located across the UK and Continental Europe comprising more than 1.3 million m² of space and accommodating more than 750 tenants.

Martyn McCarthy, chief executive officer for Valad Europe, commented: 'Our collective teams' and advisors have been working tirelessly to achieve this and we are extremely pleased to have finalised this complex cross-border refinancing in the current climate. This serves as an excellent base from which we will continue to drive income growth, complete asset management initiatives and seek to maximise returns to the DUKE joint venture.

'Following on from our successful EUR 300 mln cross-border refinancing of the European High Income Fund last month, the refinancing of DUKE is another positive endorsement by our lenders of Valad Europe's real estate platform across the UK and Europe.'

According to McCarthy, Valad Europe has now refinanced all near-term loan expiries of any significant scale. The company is now looking at various workout, single mandates and portfolio acquisition opportunities across its platform, he added.

Earlier this week it emerged that Valad Europe is offering an alternative to Opera Uni-Invest CMBS bondholders which are due to vote on 17 April in Amsterdam on a solution for the distressed Dutch portfolio. Uni-Invest, the owner of the Dutch portfolio underpinning the EUR 750 mln facility, defaulted on the bond’s maturity deadline in mid-February.

Valad Europe is proposing a ‘consensual restructuring’ option under which it would be appointed as third-party asset manager to implement an accelerated property disposal plan of the portfolio of 220 offices and warehouses located throughout the Netherlands. Under the plan, the loan would be restructured and the bond’s maturity date (classes A to D) would be extended until February 2016.