Schroder Eur Real Est Inv Trust PLC New lettings and increase to debt facility (5312R)
30 Ottobre 2019 - 8:00AM
UK Regulatory
TIDMSERE
RNS Number : 5312R
Schroder Eur Real Est Inv Trust PLC
30 October 2019
30 October 2019
NEW LETTINGS SECURED ALONGSIDE INCREASE TO DEBT FACILITY AT
PARIS OFFICE ASSET
Schroder European Real Estate Investment Trust Plc ("SERE" or
the "Company"), the company investing in European growth cities,
announces it has completed three new lease agreements at its
Saint-Cloud office investment in Paris. It has also increased the
debt facility secured against the asset by EUR4 million, taking the
total loan to EUR17 million, with the proceeds being used to fund
the ongoing portfolio-wide capital expenditure programme.
Asset management
Totaling c. 3,720 sqm of space, the new lease agreements will
generate EUR0.8 million of annual rental income. Details of the
individual transactions are as follows:
-- A lease extension and floorspace expansion with existing
occupier Outscale, the cloud operating system company, taking its
occupancy from c. 1,695 sqm to c. 2,600 sqm. The six year fixed
term lease commences in April 2020, at a rent of EUR0.6 million
p.a., reflecting an uplift of EUR0.25 million on the previous
agreement;
-- A new three year lease with Ascott Informatique, an IT
company, for 850 sqm, commencing September 2019, at a rent of
EUR0.17 million p.a.; and
-- A new 12 year lease with a government body for c. 270 sqm of
storage accommodation, at a rent of EUR22,000 p.a.
Acquired in February 2017 for approximately EUR30 million, the
15,800 sqm office building, in Ile de France, Western Paris, is
around 90% let to 11 tenants and is valued at EUR37.9 million (as
at 30 September 2019).
Increased debt facility
The Company has also completed a EUR4 million increase to its
existing debt facility secured against the asset, with Banque
Populaire, taking the total loan to EUR17 million.
The loan represents an LTV of 45% against the value of the
property. The loan matures in December 2024 and has a margin of
1.33% above the 3 month Euribor rate. With Euribor currently
negative, it is applied at zero, resulting in a current total
all-in interest cost of 1.33% p.a. The Company has acquired an
interest rate cap to limit the maximum future potential interest
cost if Euribor were to increase, to an all-in rate of 2.6%
p.a.
The loan proceeds will be used to fund capital expenditure
across the portfolio. This will include preliminary works at the
Company's other Paris office investment, Boulogne-Billancourt,
where a conditional agreement for a long term lease has now been
signed with the existing tenant Alten, effective on completion of a
comprehensive refurbishment of the building. The Company is
progressing with planning and detailed design work for this
refurbishment, with an expectation of starting the full works
program in H1 2020. Once complete, the project will enhance the
building quality and income profile of the portfolio and has the
potential to deliver attractive development profits.
Following the loan increase, the Company has total outstanding
debt of EUR77 million across six facilities, representing an LTV of
just under 30% against the overall gross asset value of the
Company. The current blended all-in interest rate is 1.4%,
substantially below the portfolio net initial yield against current
valuation of c. 6.2%. The Company expects to take further gearing
to fund the Paris Boulogne-Billancourt refurbishment project, which
would take overall gearing to circa 35% LTV.
Jeff O'Dwyer, of Schroder Real Estate Investment Management
Limited, commented: "We continue to make good progress with our
asset management programme, demonstrating the ongoing demand from a
diverse range of occupiers for space in our properties. The
transformational redevelopment of Boulogne-Billancourt remains on
track and we look forward to providing the market with further
updates in due course."
Enquiries:
Duncan Owen/Jeff O'Dwyer
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
Dido Laurimore/Richard Gotla/Methuselah Tanyanyiwa Tel: 020 3727 1000
FTI Consulting
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END
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