24th Oct 2016 07:00
Starwood European Real Estate Finance Ltd (SWEF)SWEF: Quarterly Factsheet Publication 24-Oct-2016 / 07:00 GMT/BSTDissemination of a Regulatory Announcement that contains inside informationaccording to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- 24 October 2016 NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLYOR INDIRECTLY, TO U.S. PERSONS OR IN, INTO OR FROM THE UNITED STATES,AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN, NEW ZEALAND OR ANY JURISDICTIONWHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS ORREGULATIONS OF SUCH JURISDICTION Starwood European Real Estate Finance Limited: Quarterly FactsheetPublication Starwood European Real Estate Finance Limited (the 'Company') announcesthat the factsheet for the third quarter ended on 30 September 2016 isavailable at: www.starwoodeuropeanfinance.com Extracted text of the commentary is set out below: 'Investment Portfolio at 30 September 2016As at 30 September 2016, the Group had 16 investments and commitments of£370.3 million as follows: Transaction Sterling equivalent Sterling equivalent balance (1) unfunded commitment (1)Centre Point, London £45.0m -5 Star Hotel, London £13.0m -Center Parcs Bonds, UK £9.5m -Industrial Portfolio, UK £31.8m -Hospitals, UK £25.0m -Hotel, Channel Islands £26.9m -Varde Partners mixed £28.8m -portfolio, UKMixed use development, £6.7m £8.3mSouth East UKRegional Budget Hotel £75.0m -Portfolio, UKTotal Sterling Loans £261.7m £8.3mIndustrial Portfolio, £22.6m -NetherlandsOffice, Netherlands £12.1m -Retail & Residential £4.0m -Portfolio, IrelandResidential Portfolio, £5.3m -Cork, IrelandResidential Portfolio, £6.8m -Dublin, IrelandLogistics, Dublin, £12.9m -IrelandTotal Euro Loans £63.7m £0.0mIndustrial Portfolio, £36.6m -Denmark,Total Danish Krona Loans £36.6m -Total Portfolio £362.0m £8.3m (1) Euro and Danish Krona balances translated to sterling at 30 September 2016 exchange rates. Portfolio ActivityThe following significant activity occurred since the publication of thelast factsheet on 25 July 2016 up to 30 September 2016. W Hotel, Netherlands: On 29 July 2016 the group received full repayment ofthe W Hotel Amsterdam loan as a result of the refinancing of the loanfollowing completion of the refurbishment and a period of trading. Regional Budget Hotel Portfolio, UK: On 23 August 2016, the Group acquiredthe mezzanine component of a package of loan facilities recently providedby internationally recognised banks to fund the acquisition of a portfolioof UK budget hotels. The portfolio is a homogeneous portfolio of UKregional limited-service hotels that is geographically diversified,benefits from strong branding and management by an international operatorand is now owned by an experienced hotel investor. The new loan is a £75million five year floating rate loan, and the Group expects to earn anattractive risk-adjusted return in line with its stated investmentstrategy. DividendOn 21 October 2016 the Directors declared a dividend of 1.625 pence perOrdinary Share (annualised 6.5 pence per Ordinary Share) in relation to thethird quarter of 2016. Capital RaisingOn 10 August 2016, the Company issued 70,839,398 New Ordinary Sharespursuant to the Placing Programme, to raise £73 million before expenses.The Issue Price was 103.05 pence per Ordinary Share, representing a premiumof 2.7 per cent to the Net Asset Value per Ordinary Share as at 31 July2016 of 100.30 pence (ex-dividend). The net proceeds of the Placing werecommitted to be used to finance the acquisition by the Group of a £75million real estate mezzanine loan secured over a UK regional portfolio ofbudget hotels (the 'Regional Budget Hotel Portfolio, UK') that washighlighted above. Foreign ExchangeThe Company had approximately £108 million of nominal hedges with two UKbanks at 30 September 2016 (converted at 30 September 2016 FX rates). Given the recent slide of Sterling relative to the Euro and Danish Krona,as at 20 October 2016 the hedges with one of the counterparties was out ofthe money in an amount of £12.8 million. If at any time this mark to marketexceeds £15 million, the Company is required to post collateral, subject toa minimum transfer amount of £1 million. Whilst this situation ismonitored closely, the Company has £27 million of available liquidity and£60 million available credit on the revolving credit facility and hencethis is not seen as a material concern. The current mark to market with the other hedging counterparty issignificantly lower than the threshold amount available and use of thisfacility will enable us to continue to proceed with non-Sterlingtransactions. CommentaryAt 30 September 2016, the average maturity of loan investments was 4.7years and the NAV £380.0 million. With a £362 million loan book, the Grouphas £27.3 million of cash to invest (excluding £8.3 million of existingcommitments) and substantial liquidity lines of £60 million to use for newlending. The Group's gross annualised total return is an attractive 8.3%and this should be viewed within the context of the relative risk/returnapproach that has been adopted to transactions. The Group looks to bestexploit this risk/return philosophy by remaining nimble and takingadvantage of opportunities across geography, sector and product type. Over the last 12 months, the Group has experienced a very material turnoverof investment positions which it has weathered well. £161 million of theGroup's loan book was repaid and these repayments have been substantiallyreinvested alongside the £116.5 million of gross proceeds raised in thesame period. In 2016 to date, the level of origination has exceeded that for the sameperiod in previous years and we ordinarily expect 65-100% of totalorigination to be achieved in the second half of any typical year. 2016 is,however, unlikely to be a typical year. Notwithstanding the investmentsuccess to date, Brexit and heightened Europe-wide uncertainty are havingimmediate and mixed impacts. The Group feels, however, that these shouldbe net positives for it in the short to long term. In the immediate future there are likely to be two consequences of thecurrent market uncertainties. Firstly, that that the quantum oftransactions may be lower ('if you don't need to do something don't do it')and, secondly, a reduced mainstream banking appetite. The Group is of theview that the next 6-12 months could see less small to medium size 'flow'business, with the market enabling the Group to exploit larger one-offopportunities. The current pipeline outlook and shape supports this view. In the medium to longer term, the pressure on the banking sector looks setto continue. Some of the Group's larger banking competitors are feelingmaterial market pressures. In addition, low ROEs for banks, furtherincreases in capital requirements and innate caution on capital intensivebusinesses all add to the sense that the role of alternative lenders likethe Group is now mainstream and quasi-permanent. We are of the view that Brexit and the macro implications of Brexitcontinue to be thoroughly discussed throughout all media forms and so wewill look to avoid repetition here. The Group continues to monitor theunfolding situation to assess the impacts upon it. Property data tends tolag the rest of the business world and it will probably be some monthsbefore we can extract meaningful analysis, not least because it is only inrecent weeks that market uncertainty has become visible in anticipation ofthe exercise of Article 50 in March 2017. We can imagine that 2017 will seea modest recessionary environment with heightened investment and lendingcaution. Any impact of Brexit on the UK and European economies remainsuncertain. In such a short term environment, the Group could foreseeproperty investment and leasing softening. Whilst there is of course goodreason for caution, for heightened scrutiny and focus on the existing loanbook, there is also reason to be optimistic that the Group can look toagain extract outsized returns for moderate risk in the UK market. The restof Europe may not be immune to heightened volatility given the number ofnational elections and referendums in the coming months and the ongoingfinancial market fragility. With the vast majority of near term loanrepayments having occurred in recent months the Group is well placed tofurther grow with a loan maturity profile now well spread out over thecoming 5 years. Key Portfolio Statistics at 30 September 2016 Number of investments 16Percentage of currently invested 68.2%portfolio in floating rate loans (1)Invested Loan Portfolio annualised 8.3%total return (2)Weighted average portfolio LTV - to 26.8%Group first £ (3)Weighted average portfolio LTV - to 66.4%Group last £ (3)Average loan term (stated maturity at 4.7 yearsinception)Average remaining loan term 3.5 yearsNet Asset Value £380.0mAmount drawn under Revolving Credit £0.0mFacility (excluding accrued interest)Portfolio value (including accrued £364.3mincome)Cash £27.3mOther net assets/ (liabilities) -£11.6m(including hedges) (1) Calculated on loans currently drawn using the exchange rates applicablewhen the loans were funded.(2) Calculated on amounts currently outstanding, excluding undrawncommitments, and assuming all currently drawn loans are outstanding for thefull contractual term. Twelve of the loans are floating rate (partially orin whole and some with floors) and returns are based on an assumed profilefor future interbank rates but the actual rate received may be higher orlower. Calculated only on amounts funded to date and excluding committedamounts and cash un-invested. The calculation excludes the origination feepayable to the Investment Manager.(3) LTV to Group last £ means the percentage which the total loancommitment less any amortisation received to date (when aggregated with anyother indebtedness ranking alongside and/or senior to it) bears to themarket value determined by the last formal lender valuation received by thedate of publication of this factsheet. LTV to first Group £ means thestarting point of the loan to value range of the loan commitments (whenaggregated with any other indebtedness ranking senior to it). For CentrePoint and the mixed use development, south east UK, the calculationincludes the total facility available and is calculated against the marketvalue on completion of the project. Remaining years to Value of loans % of invested portfoliocontractual maturity*0 to 1 years £6.0m 1.7%1 to 2 years £49.0m 13.5%2 to 3 years £138.6m 38.3%3 to 5 years £143.4m 39.6%5 to 10 years £25.0m 6.9% *excludes any permitted extensions. Note that borrowers may elect to repayloans before contractual maturity. Country % of invested assetsUK - Regional England 51.5UK - Central London 14.6Netherlands 9.1Ireland 8.7Denmark 8.5Channel Islands 7.6 Sector % of invested assetsHospitality 35.4Light Industrial 24.7Residential for sale 11.4Retail 8.2Healthcare 7.0Residential for rent 4.7Office 4.4Logistics 4.0Other 0.2 Loan type % of invested assetsWhole loans 47.5Mezzanine 52.5 Loan type % of invested assetsSterling 73.6Euro 17.9Danish Krona 8.5' For further information, please contact: Robert PeelFidante CapitalT: +44 20 7832 0900 Peter DentonStarwood CapitalT: +44 20 7832 0900 Notes: Starwood European Real Estate Finance Limited is an investment companylisted on the main market of the London Stock Exchange with an investmentobjective to provide Shareholders with regular dividends and an attractivetotal return while limiting downside risk, through the origination,execution, acquisition and servicing of a diversified portfolio of realestate debt investments in the UK and the wider European Union's internalmarket. www.starwoodeuropeanfinance.com. The Group is the largest London-listed vehicle to provide investors withpure play exposure to real estate lending. The Group's assets are managed by Starwood European Finance PartnersLimited, an indirect wholly-owned subsidiary of the Starwood Capital Group. --------------------------------------------------------------------------- Language: English ISIN: GG00B79WC100 Category Code: MSCM TIDM: SWEF Sequence Number: 3507 Time of Receipt: 21-Oct-2016 / 16:41 GMT/BST End of Announcement EQS News Service --------------------------------------------------------------------------- 513685 24-Oct-2016UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.
Related Shares:
Starwood Eur