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Starwood European raises net asset value despite "difficult" climate

20th Oct 2023 11:17

(Alliance News) - Starwood European Real Estate Finance Ltd on Friday said that despite a "difficult market backdrop" its portfolio remained robust in the latest quarter, with net asset value increasing.

The Guernsey-based investor, which manages high quality senior and mezzanine real estate debt in the UK and Europe, said its NAV at September 30 was 104.46 pence per share, up 0.7% from 103.75p at June 30.

Starwood European shares were down 1.6% at 87.80p on Friday in London.

The company declared a 1.375p per share dividend for the third quarter of 2023, and said its portfolio continues to support annual payments of 5.5p per share with a yield of 6.3% on the share price.

Starwood also said 86.6% of its portfolio is contracted at floating interest rates.

"Our real estate debt portfolio has continued to deliver results against a difficult market backdrop, providing a regular, consistent and fully covered dividend and substantial inflation protection," commented Chair John Whittle. "Our high quality loan book has performed broadly in line with expectations and there have been no changes to the credit risk levels applied to any of the loan investments during the quarter."

Starwood also reported further realisation progress, with GBP74.6 million or 19.6% of its total funded loan portfolio at June 30 repaid during the period. This included partial repayment of five loans and full repayment of two.

The portfolio has an average remaining loan term of 1.4 years, and Starwood said its defensive qualities are reflected in its "continued NAV stability in a challenging macro environment".

Whittle said Starwood was "working to return cash to shareholders in an orderly manner as soon as reasonably practicable following the repayment of loans, while retaining sufficient working capital for ongoing operations and the funding of committed but currently unfunded loan commitments.

"We have made good progress on this objective so far this year with GBP40.0 million being returned to shareholders and a cash reserve of GBP44.5 million being created to fund the currently unfunded loan cash commitments."

By Emma Curzon, Alliance News reporter

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