Starwood European secures new loans in 2018 results – Starwood European Real Estate announced its 2018 year-end results today. New loans to borrowers totalled £208.0m, and net investment was £70.8m. The NAV total return was +7.0%, and the NAV per share was 102.68p. Share price was 102.0 at 31 December 2018, indicating the company was trading at a 0.7% discount. Dividends paid in respect to the 2018 financial year total 6.5p. At the end of 2018, Starwood moved to trading at a discount, having normally traded at a premium. The company commented that negative investor sentiment could be the reason for the shift to discount – at the time, credit spreads were widening and there were fears that US rates would continue to rise. Things have settled down, however and the company has noted that they are back trading at a premium in early 2019. In regards to new loan originations, the two largest commitments were to a mixed use scheme in central London, and another mixed use office and hotel property in Madrid, Spain.
Stephen Smith, chairman at Starwood European, commented: “The United Kingdom’s imminent departure from the European Union, with or without an agreement, represents a potential threat to the UK economy as well as wider Europe. On a cyclical view, national economies across Europe appear to be heading at best towards lower growth and in some cases towards recession. The potential impact of Brexit could have a further destabilising effect. To some extent the potential impact of an unsatisfactory UK exit from the EU has already been priced into markets and forecasts, but significant headwinds could arise should there be an unstructured settlement. It is extremely difficult in the circumstances to anticipate the potential impact on markets, so your board is keeping a particularly watchful eye on the macro position.
The strategy to incrementally grow the overall size of the group, to minimise cash drag from repayments and to use the revolving credit facility where appropriate, will continue to be our focus during 2019. We anticipate that we will build on the successes of the recent past and the directors remain optimistic about the prospects and opportunities for the group in the year ahead. The board will continue to inform you of progress by way of the quarterly fact sheets and investment updates as deals are signed. On behalf of the board, I would like to close by thanking shareholders for your commitment and I look forward to briefing you on the group’s progress later this year.”
SWEF : Starwood European secures new loans in 2018 results