At 30 June 2016, Starwood European Real Estate Finance’s NAV was 100.92p and its share price 105.75p. The fund continues to target a dividend at an annualised rate of 6.5 pence per Ordinary Share and has declared a dividend of 1.625 pence per Ordinary Share (6.5 pence annualised) for each of the first two quarters of 2016.
As at 30 June 2016, the Group was fully invested with investments and commitments of £323.8 million. The Group experienced substantial loan repayments in the first half of the year. These came to £92.1 million including amortisation, in addition to £37.7 million received in the last quarter of 2015. Despite this, the Group remained substantially fully invested throughout the period as origination in the first half of 2016 has been strong, with total commitments to new loans of approximately £100 million, compared to an average of £35 – £40 million during the same period in the prior two years.
The statement says the second half of the year has historically been stronger for the Group with 65-100 per cent of loan origination in previous years occurring in this period. Considering the maturity profile of the Group’s remaining loans at 30 June 2016 set out on page 8, which shows that approximately 6 per cent of the invested portfolio is expected to mature within the next year, the Board and Investment Manager recognise the likely need to raise further equity in order to fund pipeline transactions in the second half of the year. The Company expects to release a Prospectus to renew the Placing Programme in the coming months.
On 23 August, the Group acquired the mezzanine component of a package of loan facilities recently provided by internationally recognised banks to fund the acquisition of a portfolio of UK budget hotels. The portfolio is a homogeneous portfolio of UK regional limited-service hotels that is geographically diversified, benefits from strong branding and management by an international operator and is now owned by an experienced hotel investor. The new loan is a £75 million five year floating rate loan, and the Group expects to earn an attractive risk-adjusted return in line with its stated investment strategy.
SWEF : Starwood European has strong pipeline of new loans