SWEF : mise à jour du portefeuille
Starwood European Real Estate Finance Ltd (SWEF)
Starwood European Real Estate Finance Limitée
Mise à jour trimestrielle du portefeuille £37.9 million repaid across four investments Fourth and fifth capital redemptions totalling £45.0 million undertaken in February and March 2024
Starwood European Real Estate Finance Limited (“SEREF” or the “Group”), a leading investor managing and realising a diverse portfolio of high quality senior and mezzanine real estate debt in the UK and Europe, is pleased to present its performance for the quarter ended 31 March 2024.
Avantages
John Whittle, président de SEREF, a déclaré :
“2024 has started well in terms of our orderly realisation strategy, with £37.9 million being realised from loan repayments during the quarter. This has enabled us to return £45.0 million to shareholders via two capital redemptions in 2024 to date.
Despite continued high interest rates, volatile economic conditions and lower transaction volumes, the portfolio has continued to perform well. Following the settlement of the Shopping Centre loan, Spain and the partial repayment of the Three Shopping Centres, Spain loan, just 5 per cent of the total funded loan portfolio is allocated to the Retail sector as of 31 March 2024.
We are on track to meet our aim of paying out a 5.5 pence per share dividend for 2024. We also expect to make further realisations in the coming months and look forward to updating shareholders on these realisations in due course.”
La fiche de la période est disponible sur : www.starwoodeuropeanfinance.com
Cours de Bourse / VNI au 31 mars 2024
Principales statistiques du portefeuille au 31 mars 2024
*exclut toute extension autorisée. Notez que les emprunteurs peuvent choisir de rembourser les prêts avant l'échéance contractuelle.
*la répartition des devises fait référence à la devise du prêt sous-jacent, cependant le capital de toutes les expositions autres que la livre sterling est couvert par rapport à la livre sterling.
(1) Le rendement total annualisé sans effet de levier est calculé sur les encours à la date de clôture, hors engagements non tirés, et en supposant que tous les emprunts tirés sont en cours pour toute la durée contractuelle. 10 des prêts sont à taux variable (partiellement ou en totalité et tous avec des planchers) et les rendements sont basés sur un profil supposé pour les taux interbancaires futurs, mais le taux réel reçu peut être supérieur ou inférieur. Calculé uniquement sur les montants financés à la date de clôture et hors montants engagés (mais incluant les commissions d'engagement) et hors trésorerie non investie. The calculation also excludes the origination fee paid to the Investment Manager. (2) LTV to Group last £ désigne le pourcentage que le prêt total tiré moins les réserves de trésorerie déductibles contrôlées par le prêteur et moins tout amortissement reçu à ce jour (lorsqu'il est agrégé avec tout autre endettement de rang parallèle et/ou supérieur à celui-ci) rapporte au marché valeur déterminée par la dernière évaluation formelle du prêteur reçue à la date de clôture. LTV au premier groupe £ désigne le point de départ de la fourchette de valeur prêt/valeur des prêts tirés (lorsqu'il est agrégé avec toute autre dette de rang supérieur). Pour les projets de développement, le calcul comprend la capacité totale disponible et est calculé par rapport à la valeur marchande présumée à l'achèvement du projet concerné.
Réalisation ordonnée et remboursement du capital
Le 31 octobre 2022, le conseil d'administration a annoncé la proposition de réalisation ordonnée et de remboursement de capital aux actionnaires de la société. Une circulaire relative à la réalisation ordonnée proposée, contenant un avis de convocation à l'assemblée générale extraordinaire (AGE), a été publiée le 28 décembre 2022. Les propositions ont été approuvées par les actionnaires lors de l'AGE de janvier 2023 et la Société cherche désormais à restituer des liquidités aux actionnaires en de manière ordonnée dès que cela est raisonnablement possible après le remboursement des prêts, tout en conservant un fonds de roulement suffisant pour les opérations en cours et le financement des engagements de prêt engagés mais actuellement non financés.
The redemptions announced and implemented in 2023 returned circa £85.0 million in total to shareholders. During the first quarter of 2024, the Company announced and implemented its fourth and fifth capital redemptions, returning, in total, circa £45.0 million to shareholders through the compulsory redemption of 43,512,736 shares. Suite au cinquième redemption, the Company has 270,178,206 shares in issue and the total number of voting rights is 270,178,206.
Liquidity and credit facilities
During 2023 the Company built up a cash reserve sufficient to cover its unfunded commitments (which as at 31 March 2024 amounted to £31.4 million). This cash reserve is included in the £53.9 million of cash held as at 31 March 2024.
During the quarter the Lloyds £25.0 million revolving credit facility was terminated. It had been due to mature in May 2024. The decision was taken to terminate it early as the Company holds sufficient cash to meet its commitments and there was no intention to use the facility before the end of the availability period.
Dividende
On 25 April 2024, the Directors announced a dividend, to be paid in May, in respect of the first quarter of 2024 of 1.375 pence per Ordinary Share in line with the 2024 dividend target of 5.5 pence per Ordinary Share
Mise à jour du portefeuille
The Group continues to closely monitor and manage the credit quality of its loan exposures and repayments. Despite continued high interest rates, volatile economic conditions and lower transaction volumes, the portfolio has continued to perform well.
On an aggregate portfolio level we continue to benefit from material headroom in underlying collateral value against the loan basis, with a current weighted average loan to value of 58 per cent. These metrics are based on independent third party appraisals (with the exception of one loan that has been marked against lower recent comparable sale levels). These appraisals are typically updated annually for income producing assets. The current weighted average age of valuations is eight months.
Significant loan repayments totalling £37.9 million, equivalent to 14 per cent of the 31 December 2023 total funded portfolio, were received during the quarter to 31 March 2024. This included full settlement of the Shopping Centre, Spain loan and 60 per cent of the Three Shopping Centres, Spain loan. These repayments mark a significant 73 per cent reduction in the Group’s exposure to the Retail sector, with just 5 per cent of the total funded loan portfolio allocated to the Retail sector as of 31 March 2024.
The Group’s exposure is spread across eleven investments. 99 per cent of the total funded loan portfolio as of 31 March 2024 is spread across six asset classes; Hospitality (50 per cent), Office (14 per cent), Light industrial (12 per cent), Healthcare (11 per cent), Life sciences (7 per cent) and Retail (5 per cent).
Hospitality exposure (50 per cent) is diversified across five loan investments. Two loans (12 per cent of hospitality exposure) benefit from State/Government licences in place at the properties and also benefit from significant amortisation that continues to decrease these loan exposures. One loan (37 per cent of hospitality exposure) has two underlying key UK gateway city hotel assets, both of which are undergoing comprehensive refurbishment programmes which are due to complete during 2024. The remaining two loans (51 per cent of hospitality exposure) have both been recently refurbished. The Group expects its exposure to hospitality to significantly reduce during 2024 from a combination of planned asset sales and refinancings of stabilised, strong performing assets. The weighted average loan to value of the hospitality exposure is 54 per cent.
The Group’s Office exposure (14 per cent) is spread across three loan investments. The weighted average loan to value of loans with office exposure is 75 per cent. The average age of these independently instructed valuation reports is less than one year and there continues to be headroom to the Group’s loan basis.
Light industrial and healthcare exposures comprise 12 per cent and 11 per cent each respectively, totalling 23 per cent of the total funded portfolio (across two investments) and provides good diversification into asset classes that continue to have very strong occupational and investor demand. Weighted average loan to value of these exposures is 57 per cent.
The Group’s Retail exposure has been materially reduced in the quarter to 31 March 2024 to £11.4 million remaining on one loan, equivalent to 5 per cent of the total funded portfolio. This is a reduction of £31.1 million or 73 per cent of Retail exposure versus the 31 December 2023 position. This followed the sale of three of the shopping centres underlying two Retail loans, with 100 per cent of net disposal proceeds being used to pay down the loans. The remaining Retail exposure of £11.4 million is held against one remaining shopping centre under the Three Shopping Centres, Spain, senior loan. This asset is well occupied and 100 per cent of the loan is forecast to be recovered when the asset is sold. The weighted average loan to value of the remaining retail exposure is 75 per cent. The value basis of this calculation is the lower of projected sale value (benchmarked against the recent sales value realised) and most recent third party independent appraisals.
The Group has no exposure to development and heavy refurbishment projects (as at 31 March 2023 this exposure amounted to 11 per cent of total loan commitments).
Analyse du risque de crédit
Tous les prêts du portefeuille sont classés et évalués au coût amorti moins les dépréciations.
During the quarter there have been no changes to the existing credit risk levels for any of the loans in the portfolio, however following the reduction during the quarter of the Retail sector exposure, there has been a £31.4 million, 33 per cent decrease in the aggregate of the Stage 2 and 3 category loans as of 31 March 2024 compared to 31 December 2023.
Le Groupe suit un modèle de dépréciation en trois étapes basé sur l'évolution de la qualité de crédit depuis la comptabilisation initiale, comme résumé ci-dessous :
The Group closely monitors all loans in the portfolio for any deterioration in credit risk. As of 31 March 2024, assigned classifications are:
Les prêts Stage 2 continuent de bénéficier d'une marge de manœuvre par rapport à la base d'investissement du Groupe. Le Groupe dispose d'une stratégie pour chacune de ces opérations qui vise le remboursement intégral du prêt sur une durée définie. Le moment du remboursement variera en fonction du niveau de soutien en fonds propres des sponsors. En règle générale, lorsque les sponsors sont prêts à injecter des fonds propres supplémentaires pour rembourser partiellement les prêts et soutenir l'exécution de leur plan d'affaires, le Groupe accordera une marge de manœuvre financière temporaire. Sinon, les sponsors mènent des processus de vente pour vendre des actifs et rembourser leurs prêts.
Cette évaluation a été faite sur la base des informations en notre possession à la date de reporting, de notre évaluation des risques de chaque prêt et de certaines estimations et jugements concernant la performance future des actifs.
Remboursements
Au cours du trimestre, les emprunteurs ont remboursé un total de 37.9 millions de livres sterling au titre des obligations de prêt suivantes :
These repayments, along with some of the cash balance held as at 31 December 2023, were used in the quarter to fund the fourth and fifth returns of capital to Shareholders (which amounted to circa £45.0 million).
Commentaire et perspectives du marché Global inflation has moved back significantly from the highly elevated levels seen in 2023 but remains above target levels. During the past few weeks the optimism around the speed at which target inflation would be reached and expectations for rapid central banks’ reductions in interest rate policy have diminished.
Recent inflation numbers have been persistently higher than expectations and target inflation levels. The overall decline since the peak in US Inflation has been considerable, having moved from 9.1 per cent in June 2022 to 3.5 per cent in March 2024. In the United Kingdom similarly there has been a significant reduction in inflation from 11.1 per cent in November 2022 to 3.2 per cent in March 2024. In this first quarter, economic data has generally pointed to a slower pace of stabilisation of inflation.
Interest rate policy makers have maintained a resolute stance on finishing the job on combatting this inflation with interest rate policy. Since the beginning of the year the expectations of the number of interest rate cuts the market expects in 2024 have reduced significantly. In the United States the Federal Reserve dot plots predicted three cuts during 2024 and the market had priced in six cuts at the beginning of the year but the expectation now is that there will only be one or two cuts during 2024. Similarly in the United Kingdom the market had priced in 1.04 percentage points of cuts at the beginning of the year but the expectation now is that there will only be 0.38 percentage points of cuts during 2024.
This has also fed into longer term interest rates which remain elevated relative to the past few years and which have rebounded from recent trough levels achieved at the end of 2023. Since the beginning of the year the US 10 Year Treasury yields have moved up more than half way back to recent peak levels. The US 10 Year Treasury rate has risen by 0.7 per cent to 4.6 per cent having started the year at 3.9 per cent which compared to a peak of 5.0 per cent in October 2023. Similarly UK 10 Year Gilt rates are 4.3 per cent which is up from 3.5 per cent at the beginning of the year and compared with a peak of 4.7 per cent in October of 2023. German 10 Year Bond rates follow the same directional trend but at lower rates and with smaller movement. The German 10 Year Bond yields are 2.5 per cent up from 2.0 per cent at the beginning of the year and compared with a peak of 3.0 per cent in October 2023.
European commercial real estate is typically financed using 3 to 5-year floating rate debt and the key benchmark for financing cost is the 5-year swap. The GBP and EUR 5-year swaps currently stand at circa 4.1 per cent and 2.7 per cent respectively, having started the year at 3.3 per cent and 2.3 per cent.
Over the last two years higher uncertainty over the levels of inflation and interest rates has been one of the key factors leading to significantly lower transaction volumes in commercial real estate and according to CBRE research, 2023 had the lowest level of investment volume since the GFC in Europe with volumes half of the levels of recent years. With stickier inflation and a higher for longer expectation for interest rates this slower trend is continuing.
A crowded set of geo-political considerations including the conflicts in Ukraine and Gaza and other tensions in the Middle East combined could continue to disrupt supply chains and commodity pricing that could create increased volatility in the path of inflation and interest rates and lead to investor hesitancy in real estate investments.
In contrast with the investment market we have seen a competitive market in real estate credit for both acquisition and refinancings. Last quarter we reported that the sentiment was meaningfully better than this time last year with a high degree of confidence in capital markets. At that time spread tightening in secondary trading had already showed a stronger market appetite and the banks were expecting healthy volumes of new issuance being cleared efficiently and with further price tightening also on the cards.
While problem areas (such as lower quality offices and distressed thinly capitalised developers) will still need to be worked through, that general sentiment has played out as expected with a very strong start of the year in capital markets. This has been seen across the board in bond markets both in and outside of the real estate space. The Investment Grade and High Yield markets are off to strong starts and in real estate specifically the US CMBS market has seen USD 19.5 billion of CMBS issuance in the first three months of the year which is an increase of 166 per cent versus USD 7.3 billion at the same time last year. We have also seen the predicted spread tightening with the Single Asset Single Borrower AAA rated tranches having been issued as tight as 140 basis points over the benchmark interest rate versus low 200s at the end of last year.
While CMBS and the unsecured bond markets play a smaller part in the European commercial real estate market, the health of the public credit markets have a knock on effect into general real estate finance sentiment and we have seen a similar dynamic in the European loan markets. There has been a larger number of active loan requests in the market and with larger average loan sizes than we have seen over the last two years. The market has been competitive both on pricing and risk relative to last year. Many of the larger transactions are in the logistics and student refinancing sectors but we are also seeing strong appetite for asset classes across the board including demand for the right types of office with a good example being the £280 million refinancing of the Blue Fin building in London which closed in the first quarter.
There are some indicators that the second quarter may be more measured than the first quarter. The VIX is the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, which is a popular measure of the stock market's expectation of volatility based on S&P 500 index options. The VIX has risen to 18.96 which is the highest level since October 2023.We have also seen the Itraxx Crossover index which is a benchmark for crossover corporate credit retrace from a recent low of 290 to 341. This is still down from a peak of 473 in October 2023 but the recent change of direction is notable. Expectations for the pace of the recovery in transaction volumes continue to move around as the interest rate and geo-political outlook develops.
Portefeuille d'investissement au 31 mars 2024
Au 31 mars 2024, le Groupe avait 11 investissements et engagements d'un montant de 256.4 millions de livres sterling comme suit :
Prêt à la valeur (LTV)
All assets securing the loans undergo third party valuations before each investment closes and periodically thereafter at a time considered appropriate by the lenders. The LTVs shown below are based on independent third party appraisals with the exception of one loan which has been marked against the lower of the projected sale value (benchmarked against the recent sales value realised) and most recent third party independent appraisal. The current weighted average age of the dates of these valuations for the whole portfolio is just over eight months. On the basis of the methodology and valuation processes previously disclosed (see 30 September 2020 factsheet with the exceptions as noted above) at 31 March 2024 the Group has an average last £ LTV of 57.9 per cent (31 December 2023: 61.8 per cent). Le tableau ci-dessous montre la sensibilité du calcul de la dette à la valeur aux variations de l'évaluation foncière sous-jacente et démontre que le Groupe dispose d'une marge de manœuvre considérable au sein des derniers LTV actuellement publiés.
Performance du cours de l'action
Les actions de la Société ont clôturé le 31 mars 2024 à 92.2 pence, ce qui a entraîné un rendement total du cours de l'action pour le premier trimestre 2024 de 4.1 %. Au 31 mars 2024, la décote par rapport à l'ANR s'élevait à 11.7 %, avec une décote moyenne sur l'ANR de 12.1 % sur le trimestre.
Remarque : la décote du 31 mars 2024 par rapport à la valeur liquidative est basée sur la valeur liquidative actuelle au 31 mars 2024, comme indiqué dans cette fiche d'information. Toutes les décotes moyennes par rapport à la valeur liquidative sont calculées comme la dernière valeur liquidative cumulée aux dividendes disponible sur le marché un jour donné, ajustée de tout paiement de dividendes à partir de la date ex-dividende.
Pour plus d'informations, s'il vous plaît contacter:
Buchanan + 44 (0) 20 7466 5000 Hélène Tarbet + 44 (0) 7788 528 143 Henry Wilson
Notes:
Starwood European Real Estate Finance Limited est une société d'investissement cotée sur le segment premium du marché principal de la Bourse de Londres dont l'objectif d'investissement est de réaliser une réalisation ordonnée des actifs de la Société. www.starwoodeuropeanfinance.com.
Les actifs du Groupe sont gérés par Starwood European Finance Partners Limited, une filiale en propriété exclusive indirecte de Starwood Capital Group. Diffusion d'une annonce réglementaire contenant des informations privilégiées conformément au règlement sur les abus de marché (MAR), transmise par EQS Group. L'émetteur est seul responsable du contenu de cette annonce. |
ISIN: | GG00BRC3R375 |
Code de catégorie : | UFP |
TIDM : | SWEF |
Code LEI : | 5493004YMVUQ9Z7JGZ50 |
Catégories OAM : | 3.1. Informations réglementées supplémentaires devant être divulguées en vertu de la législation d'un État membre |
N° de séquence : | 317753 |
Identifiant d'actualités EQS : | 1888779 |
Fin de l'annonce | Service d'actualités EQS |
Annonce réglementaire britannique transmise par EQS Group AG. L'émetteur est seul responsable du contenu de cette annonce.