VastNed O/I refinances EUR 370m loan portfolio

Rotterdam-based VastNed Offices/Industrial has refinanced its existing loan portfolio for Dutch and German property totalling EUR 370m to deal with a breach of one of its loan covenants. The refinancing relates to about 62% of the company's outstanding loan portfolio.

The refinancing was agreed with a consortium of existing banks led by ING Real Estate, and runs for a duration of at least three years. VastNed O/I said the agreement widened conditions in relation to the loan-to-value ratio and interest rate coverage. The average interest on total loan portfolio at year-end 2008 after refinancing and taking interest rate swaps concluded into account came to 5%, compared to 4.3% before the refinancing.

VastNed O/I announced the refinancing at the presenation of its 2008 results. The direct investment result came to EUR 32.5 mln, compared to EUR 35.1 mln a year earlier. The indirect investment result came to - EUR 48.3 mln, compared to a profit of EUR 5.6 mln in 2007.

CEO Reinier van Gerrevink said: 'The credit crisis deteriorated in the final quarter of 2008 and has seeped through into the real economy. In spite of these developments, our strategic asset allocation focusing on liquid office markets and a very high level of leasing activity have pushed up the average occupancy rate in 2008 to almost 91% (2007: 88.5%). This leasing activity succeeded in concluding new leases or lease renewals for over 16% of the total rental income.

'In view of the exceptionally competitive office market, the large number of leases concluded required additional lease incentives and letting costs such as estate agents’ commissions, which continued to put pressure on net rental income. This also caused the direct investment result per share to fall to EUR 1.59 (2007: EUR 1.71).'