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SWEF Starwood European Real Estate Finance Limited

92.20
-1.80 (-1.91%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Starwood European Real Estate Finance Limited LSE:SWEF London Ordinary Share GG00BRC3R375 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.80 -1.91% 92.20 92.60 94.60 94.60 92.40 93.00 8,307 16:35:02
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 39.02M 29.36M 0.0742 12.45 365.53M

SWEF: June 2018 Factsheet (708591)

30/07/2018 7:01am

UK Regulatory


Dow Jones received a payment from EQS/DGAP to publish this press release.

 
 
 Starwood European Real Estate Finance Ltd (SWEF) 
SWEF: June 2018 Factsheet 
 
30-Jul-2018 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
30 July 2018 
 
 NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY 
       OR INDIRECTLY, TO U.S. PERSONS OR IN, INTO OR FROM THE UNITED STATES, 
     AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN, NEW ZEALAND OR ANY JURISDICTION 
         WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR 
          REGULATIONS OF SUCH JURISDICTION 
 
Starwood European Real Estate Finance Limited: Quarterly Factsheet 
Publication 
 
Starwood European Real Estate Finance Limited (the "Company") announces that 
 the factsheet for the second quarter ended on 30 June 2018 is available at: 
 
          www.starwoodeuropeanfinance.com [1] 
 
          Extracted text of the commentary is set out below: 
 
          Investment Portfolio at 30 June 2018 
 
  As at 30 June 2018, the Group had 19 investments and commitments of GBP472.1 
          million as follows: 
 
                        Sterling equivalent Sterling equivalent 
                                balance (1) unfunded commitment 
                                                            (1) 
  Industrial Portfolio,              GBP18.6m                   - 
                     UK 
          Hospitals, UK              GBP25.0m                   - 
   Varde Partners mixed              GBP3.0 m                   - 
          portfolio, UK 
 Mixed use development,              GBP12.3m               GBP0.9m 
          South East UK 
         Regional Hotel              GBP45.9m                   - 
          Portfolio, UK 
Credit Linked Notes, UK              GBP21.8m                   - 
            real estate 
   Total Sterling Loans             GBP126.6m               GBP0.9m 
 Residential Portfolio,               GBP6.7m                   - 
        Dublin, Ireland 
     Logistics, Dublin,              GBP13.0m                   - 
                Ireland 
Hotel, Barcelona, Spain              GBP40.7m                   - 
School, Dublin, Ireland              GBP16.7m                   - 
  Industrial Portfolio,              GBP57.2m                   - 
    Central and Eastern 
                 Europe 
Three Shopping Centres,              GBP31.2m               GBP8.3m 
                  Spain 
 Shopping Centre, Spain              GBP11.1m               GBP3.9m 
 Hotel, Dublin, Ireland              GBP53.1m                   - 
   Residential, Dublin,               GBP4.1m               GBP3.9m 
                Ireland 
  Office, Paris, France              GBP23.0m                   - 
     Industrial, Paris,              GBP13.1m                   - 
                 France 
 Student Accommodation,               GBP9.4m               GBP0.6m 
                 Dublin 
           Hotel, Spain              GBP24.0m              GBP24.6m 
       Total Euro Loans             GBP303.3m              GBP41.3m 
        Total Portfolio             GBP429.9m              GBP42.2m 
 
(1) Euro balances translated to sterling at period end exchange rates. 
 
          Dividend 
 
  On 27 July 2018 the Directors declared a dividend in respect of the second 
quarter of 1.625 pence per Ordinary Share (equivalent to 6.5 pence per annum 
        per Ordinary Share) payable on 31 August 2018 to shareholders on the 
          register at 10 August 2018. 
 
          Portfolio activity 
 
 As at 30 June 2018, the average remaining maturity of the Group's loan book 
   was 3.1 years. The gross levered return of the invested loan portfolio is 
          8.2 per cent per annum. 
 
    The following portfolio activity occurred in the second quarter of 2018: 
 
 Repayment: Hotel, Channel Islands: The Group received full repayment of the 
          loan advanced to a Channel Islands Hotel company on 18 May 2018. 
 
The Group also received amortisation in the quarter on other loans totalling 
   GBP3.5 million, some of these payments relate to scheduled amortisation but 
 the majority related to asset sales in line with borrowers' business plans. 
 
New Loan: Industrial, Paris: On 4 May 2018 the Group arranged and subscribed 
     to a EUR14.77 million note issuance, the proceeds of which were used to 
  finance the acquisition of a light industrial asset in the Parisian region 
          of France. 
 
   The Group also advanced GBP2.2 million of proceeds to borrowers to which it 
          has existing outstanding commitments. 
 
    Following the new loan activity, and the GBP30.4 million of repayments and 
       amortisation received in the second quarter, the Group remained fully 
     invested at 30 June 2018 with GBP42.2 million of commitments to fund. The 
      Group had drawn GBP54 million on its available credit facilities of GBP114 
          million and had cash of GBP8.7 million for working capital purposes. 
 
  The Group made a record level of new commitments in the first half of 2018 
    with GBP147.5 million of new commitments made (of which GBP114.4 million was 
   funded in the first half of the year). Repayments were slightly below the 
     same period in prior years and as a result, the Group's net commitments 
           increased by GBP73.4 million in the first half of the year. 
 
 The table below summarises the new commitments made and repayments received 
  in the first six months of 2015 to 2018 and demonstrates the growth of the 
          portfolio. 
 
        New Commitments             Repayments &   Net Increase 
                                    Amortisation             in 
 
                                                    Commitments 
H1 2015         GBP31.3 m                  GBP21.9 m         GBP9.4 m 
H1 2016         GBP98.9 m                  GBP92.1 m         GBP6.8 m 
H1 2017        GBP115.5 m                  GBP85.2 m        GBP30.3 m 
H1 2018        GBP147.5 m                   GBP74.1m         GBP73.4m 
 
    In the last two financial years, new commitments have been broadly equal 
         between the first and second half of the year and the Group remains 
     optimistic that this trend is likely to continue, although the upcoming 
     summer months are often the most quiet in the market with more activity 
       likely to be seen towards the end of the year (in the normal course). 
 
  Repayments in the first half of the year were approximately 18 per cent of 
    loans advanced at the end of 2017. We consider this to be the normalised 
 level we anticipate and whilst it is always difficult to forecast potential 
 repayments, and some years may be significantly higher or lower (as seen in 
   2017), we anticipate that the second half of 2018 may see repayments at a 
similar level to the first half of the year. The Group will continue to seek 
  to minimise cash drag from potential repayments by utilising the revolving 
          credit facilities available to it. 
 
          Commentary 
 
 Whilst the agreement of the terms of Brexit between the UK and the European 
   Union are making slow progress, the elongated uncertainties of Brexit are 
         less evident in the real estate markets. Appetite for London office 
investment is unabated and while Chinese investors have pulled back from new 
      acquisitions, there are many other sources of capital attracted to the 
 London investment market illustrated through recent transactions such as Ho 
      Bee Land, a Singaporean listed company buying Ropemaker Place for GBP650 
     million, CK Holdings' purchase of 5 Broadgate for GBP1 billion and Korean 
    investors buying 20 Old Bailey and Cannon Street House. The occupational 
      market has also been strong with Savills reporting this month that the 
  City's 12 month rolling take-up hit its highest level since September 2015 
 at 7.6 m square feet, which is also 25 per cent up on this point last year. 
 
 Student accommodation, residential private rented sector, light industrial, 
     logistics and hospitality markets all remain robust with good levels of 
 investor interest. The outlier in the UK is retail where there are a number 
  of headwinds and since the beginning of the year there has been a constant 
     stream of bad news on retail occupiers scaling back, Creditor Voluntary 
    Arrangements and tenant insolvencies. While some areas of retail will do 
      better than others from a leasing point of view, it is likely that the 
  negative sentiment will still affect the values of UK retail assets across 
  the board. As a result we are seeing increased interest from borrowers who 
had been looking to sell last year but are now considering refinancing as an 
       alternative or a necessity as they begin to come up against financing 
   maturities. We are cautious around this trend and are likely to watch and 
       wait before considering new UK retail investments. Our overall retail 
          exposure in the UK is 1.5 per cent which is derived from smaller 
          contributions of mixed use assets or portfolios. 
 
   In the debt market there has been a resurgence in European CMBS issuance. 
 With a small number of exceptions, over the past few years CMBS pricing had 
 been at a level where bank and insurance companies generally would beat the 
     CMBS market on pricing. However, since the end of 2017 CMBS pricing has 
     lowered in line with other forms of fixed income. European fixed income 
       yields have been driven lower by ECB bond buying and as a result CMBS 
       pricing has come into lower levels which makes it competitive. A good 
 example of the pricing arbitrage is the GBP427 million Ribbon hotel portfolio 
  CMBS which priced at a blended margin of around 160bps at 65 per cent LTV. 
          This represents pricing about 100bps 
 
  inside of where the bank market would typically be for this loan. New CMBS 
       issuance has created a lot of interest and headlines but to put it in 
context volumes at less than EUR2 billion in only five issuances so far this 
      year are still quite small compared to the overall EUR1 trillion sized 
          European commercial real estate loan market. 
 
  While these CMBS financings have been in sectors that the company has been 
  active in such as hospitality and light industrial, we do not believe that 
CMBS is currently changing the competitive landscape for the investments the 
    Group is making. In order to be considered for a CMBS structure, the key 
   elements are for the loan to have sufficient scale, to spread the cost of 
   issuance and create sufficiently large note sizes, and for the underlying 
   collateral to have sufficient in place yield and granularity of income to 
    obtain the required ratings analysis. When looking at whether CMBS would 
   have been suitable as an alternative for previous investments made by the 
Group we concluded that CMBS would have had limited success for a variety of 
   reasons. For example, on the light industrial side for our Danish and CEE 
    loans both the size of the loan and the jurisdictions resulted in a CMBS 
structure not being feasible. For our Dutch portfolio both the loan size and 
  the multiple closings required for the borrowers needs would have not been 
          suitable for CMBS issuance. 
 
     In the subordinated debt space, we continue to see that widely marketed 
    mezzanine debt on income producing assets is being priced lower than our 
 return requirements. According to Debtwire recent examples include a Libor+ 
  550bps mezzanine for the Enigma student housing portfolio and Libor+625bps 
 for the Ribbon hotel portfolio. We continue to see investment opportunities 
   in mezzanine financings however we will have to work hard to successfully 
   originate this type of debt by finding ways of adding value for borrowers 
 that creates an acceptable risk / reward return profile for the Group which 
          is in line with the Group's stated return targets. 
 
Share Price / NAV at 30 June 2018 
 
Share price (p)     108.0 
NAV (p)             102.0 
Premium/ (discount) 5.0% 
Dividend yield      6.00% 
Market cap          GBP405.0 m 
 
Key Portfolio Statistics at 30 June 2018 
 
Number of investments                                         19 
Percentage of currently invested portfolio in floating     92.0% 
rate loans 
Invested Loan Portfolio unlevered annualised total          7.4% 
return (1) 
Invested Loan Portfolio levered annualised total            8.2% 
return (2) 
Weighted average portfolio LTV - to Group first GBP (3)      13.3% 
Weighted average portfolio LTV - to Group last GBP (3)       64.9% 
Average loan term (stated maturity at inception)       4.1 years 
Average remaining loan term                            3.1 years 
Net Asset Value                                          GBP382.5m 
Amount drawn under Revolving Credit Facilities           -GBP54.0m 
(excluding accrued interest) 
Loans advanced                                           GBP412.1m 
Financial assets held at fair value (including accrued    GBP21.9m 
income) 
Cash                                                       GBP8.7m 
Other net assets/ (liabilities) (including hedges)        -GBP6.2m 
Origination Fees - current quarter                         GBP0.1m 
Origination Fees - last 12 months                          GBP2.2m 
Management Fees - current quarter                          GBP0.7m 
Management Fees - last 12 months                           GBP2.8m 
 
          (1) The unlevered annualised total return is calculated on amounts 
       outstanding at the reporting date, excluding undrawn commitments, and 
  assuming all drawn loans are outstanding for the full contractual term. 17 
 of the loans are floating rate (partially or in whole and some with floors) 
  and returns are based on an assumed profile for future interbank rates but 
 the actual rate received may be higher or lower. Calculated only on amounts 
 funded at the reporting date and excluding committed amounts (but including 
       commitment fees) and excluding cash un-invested. The calculation also 
          excludes the origination fee payable to the Investment Manager. 
 
   (2)The levered annualised total return is calculated as per the unlevered 
   return but takes into account the amount of net leverage in the Group and 
          the cost of that leverage at current LIBOR/EURIBOR. 
 
(3) LTV to Group last GBP means the percentage which the total loan drawn less 
          any amortisation received to date (when aggregated with any other 
     indebtedness ranking alongside and/or senior to it) bears to the market 
        value determined by the last formal lender valuation received by the 
reporting date. LTV to first Group GBP means the starting point of the loan to 
 value range of the loans drawn (when aggregated with any other indebtedness 
       ranking senior to it). For the Irish School, Dublin and the mixed use 
development, south east UK and Student Accommodation, Dublin the calculation 
 includes the total facility available and is calculated against the assumed 
          market value on completion of the project. 
 
      Remaining years to Value of loans (GBPm)       % of invested 
   contractual maturity*                               portfolio 
            0 to 1 years                15.3                 3.6 
            1 to 2 years               112.7                26.2 
            2 to 3 years               133.7                31.1 
            3 to 5 years               143.2                33.3 
           5 to 10 years                25.0                 5.8 
 
  *excludes any permitted extensions. Note that borrowers may elect to repay 
          loans before contractual maturity. 
 
              Country % of invested assets 
UK - Regional England                26.6% 
                Spain                24.9% 
  Republic of Ireland                23.9% 
              Hungary                10.8% 
               France                 8.4% 
  UK - Central London                 2.9% 
       Czech Republic                 2.5% 
 
               Sector % of invested assets 
          Hospitality                37.3% 
     Light Industrial                20.8% 
               Retail                11.4% 
               Office                 7.9% 
           Healthcare                 5.8% 
            Education                 3.9% 
            Logistics                 3.4% 
 Residential for rent                 3.2% 
 Residential for sale                 2.8% 
Student Accommodation                 2.2% 
                Other                 1.3% 
 
             Loan type % of invested assets 
           Whole loans                75.1% 
             Mezzanine                19.8% 
Other debt instruments                 5.1% 
 
Loan type % of invested assets* 
 Sterling                 29.5% 
     Euro                 70.5% 
 
*the currency split refers to the underlying loan currency, however the 
capital on all non-sterling exposure is hedged back to sterling. 
 
For further information, please contact: 
 
Ipes (Guernsey) Limited as Company Secretary - 01481 735810 
 
          Sarah Newton 
 
          Starwood Capital - 020 7016 3655 
 
          Duncan MacPherson 
 
          Stifel Nicolaus Europe Limited - 020 7710 7600 
 
          Neil Winward 
 
          Mark Bloomfield 
 
          Gaudi Le Roux 
 
Notes: 
 
      Starwood European Real Estate Finance Limited is an investment company 
        listed on the premium segment of the main market of the London Stock 
  Exchange with an investment objective to provide Shareholders with regular 
      dividends and an attractive total return while limiting downside risk, 
          through the origination, execution, acquisition and servicing of a 
     diversified portfolio of real estate debt investments in the UK and the 
wider European Union's internal market. www.starwoodeuropeanfinance.com [1]. 
 
  The Company is the largest London-listed vehicle to provide investors with 
          pure play exposure to real estate lending. 
 
The Group's assets are managed by Starwood European Finance Partners 
Limited, an indirect wholly-owned subsidiary of the Starwood Capital Group. 
 
ISIN:          GG00B79WC100 
Category Code: MSCM 
TIDM:          SWEF 
LEI Code:      5493004YMVUQ9Z7JGZ50 
Sequence No.:  5794 
EQS News ID:   708591 
 
End of Announcement EQS News Service 
 
 
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=becc5c83790358f02808a7970e9d8d13&application_id=708591&site_id=vwd_london&application_name=news 
 

(END) Dow Jones Newswires

July 30, 2018 02:01 ET (06:01 GMT)

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