Busy year for Starwood as lending hits record levels – Starwood European Real Estate Finance generated an NAV total return of 7.2 per cent and a share price total return of 7.6 per cent for 2017. Total dividends of 6.5 pence were declared in relation to the year ended 31 December 2017.
The manager says that the group had a good start to the year with GBP115.5 million of new investments by 30 June 2017, making it the
highest first half origination volume for the group. In addition, an additional four new loans, with a total commitment of GBP130.3 million, were all made in the period from the end of November to end of December, also making it the largest new origination volume for the full year for the group.
New loans
During the financial year, the following new loans were originated:
- Industrial Portfolio, Central and Eastern Europe: On 30 March 2017, the Group committed to provide a EUR68.5 million whole loan for a portfolio of industrial assets located across Central and Eastern Europe. The 3-year floating rate loan represents the opportunity to further diversify geographically and support a strong sponsor with a proven track record. EUR26.5 million of the loan was funded on 30 March 2017 with the remaining commitment drawn on 31 May 2017.
- School, Dublin, Ireland: On 31 March 2017, the Group advanced a EUR18.85 million 3-year floating rate whole loan to support the acquisition and repositioning of a South Dublin office building in the Republic of Ireland. The building will be converted to educational use with a new lease to a premium global education company. The sponsor, Barry O’Callaghan, is a highly regarded local investor with deep experience in the education sector.
- Hotel, Barcelona, Spain: On 31 March 2017, the Group advanced a EUR46.0 million 4-year floating rate whole loan to finance the acquisition of a
4-star, 240-key hotel in central Barcelona’s 22@ district. The borrower is a partnership between institutional-quality investors with track records of successful hotel acquisitions throughout Europe. The hotel is well-positioned to benefit from the sponsors’ active asset management strategy in a Barcelona market with appealing hospitality performance metrics and high barriers to entry. - Shopping Centres, Spain: On 24 November 2017, the Group closed a EUR44.63 million, five-year floating rate whole loan secured by three shopping centres in Spain. The loan was made available to fund an initial acquisition advance along with capex funding to support the sponsors’ proven retail repositioning capability to make further investment in the properties. The properties are well-anchored, dominate their catchment areas and are positioned to benefit from the sponsors’ active asset management strategy.
- Regional Hotel Portfolio, UK: On 20 December 2017, the Group closed on a GBP45.87 million mezzanine loan secured by a well-invested portfolio of geographically diversified mid-range hotels in strong regional UK cities.
- Credit Linked Notes, UK Real Estate Loans: On 22 December 2017, the Group acquired GBP21.77 million junior notes linked to the performance of a portfolio of high quality UK real estate loans owned by a major commercial bank. The underlying reference loan pool is secured by an institutional quality, well-diversified pool of commercial real estate assets with an average LTV of less than 50 per cent.
- Office Building, Paris, France: On 22 December 2017, the Group subscribed to a senior EUR26 million note issuance, the proceeds of which were used to finance an office building in suburban Paris.
Repayments
During the financial year, the Group received GBP213.1 million of repayments and amortisation (approximately 56 per cent of NAV). The following loans were repaid in full:
- Industrial Portfolio, Denmark: On 28 February 2017, the Group received full repayment of Kr. 307 million in the Danish Industrial Portfolio loans as a
result of the sale of the portfolio. A number of loans in the Group’s portfolio benefit from prepayment protection in their early years, providing
the Group with a level of income protection should such loans repay whilst in that protected period. The Danish loan was originated in June 2015 and
benefitted from such provisions. - Industrial Portfolio, Netherlands: On 16 March 2017, the Group received full repayment of EUR26 million in the the Industrial Portfolio, Netherlands loan as a result of the sale of the portfolio, in line with the sponsor’s business plan.
SWEF : Busy year for Starwood as lending hits record levels