Schroder European REIT refinances with €14 million loan via VR Bank

By Marisa Wong

Los Angeles, Dec. 22 – Schroder European Real Estate Investment Trust plc announced it completed the early refinancing of its largest debt expiry in 2023, a €14 million loan with VR Bank Westerwald, secured against its Hamburg and Stuttgart office investments.

Competitive financing terms were obtained from five different lenders with VR Bank Westerwald being the most competitive, according to a press release

The refinancing is for 4.75 years and based on a margin of 0.85%, in line with the existing margin.

Due to the competitive terms, the company has elected to extend the facility by a further €4 million. The facility will be drawn on April 1, 2023 and expire on Dec. 30, 2027.

The total interest cost has been fixed at the time of signing at 3.8%, which is the five-year euro swap rate plus a margin of 85 basis points.

With this new facility, the company’s third party debt totals €84.7 million across seven loan facilities.

This represents a loan to value of about 30% against the company’s gross asset value and well below the LTV prospectus limit of 35% net of cash. All facilities are on a non-recourse lending basis.

After drawdown, the weighted average loan term increases by one year from 1.6 years as of December 2022 to 2.6 years. The company’s blended all-in interest rate increases around 60 bps from 1.9% to 2.5%.

The company said it is in various discussions with lenders regarding its other two debt expiries that occur within the next 12 months and said it is confident in its ability to refinance those loans.

The real estate investment trust is based in London.

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