10th Apr 2014 16:42
LONDON (Alliance News) - Tritax Big Box REIT PLC Thursday said it has agreed a deal that will provide GBP23.5 million of financing to the Sainsbury's Distribution Centre in Leeds it acquired from a fund advised by Ekistics Property Advisors LLP in December.
In a statement, the real estate investment trust said the GBP23.5 million senior debt financing deal has been agreed with Barclays Bank PLC, representing a loan to value of about 48%.
The debt financing is for a term of four years, with an option to extend prior to the end of year two and three up to a maximum of six years, with a margin of 175 basis points above Libor.
Tritax said it intends to operate a flexible gearing strategy with respect to individual assets.
"Generally, the group expects to utilise borrowings to a greater extent on individual assets with longer unexpired lease lengths, such as the Sainsbury's distribution centre, while assets with shorter lease terms are expected to be geared to a lesser extent," Tritax said in a statement.
"As set out in the company's investment policy, the group's initial target level of aggregate borrowings is 45% of the group's gross assets, with a medium term target of 40% of the group's gross assets," Tritax added.
The distribution centre was acquired for GBP48.8 million in December, funded by equity proceeds, though at the time Tritax said it expected senior debt finance to be introduced in the near term.
Tritax shares Thursday closed at 107.99 pence, up 0.5%.
By Samuel Agini; [email protected]; @samuelagini
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