Pbb Deutsche Pfandbriefbank has provided two loans to Schroder European Real Estate Investment Trust totalling €30.5 million to finance German properties from its portfolio.
The two facilities have a blended fixed rate of interest of 1.1 percent.
The first loan of €16.5 million is for a 10-year term and is secured against two retail assets in Berlin and Frankfurt which the REIT acquired earlier this year. The interest-only loan is priced at a fixed rate of 1.31 percent per year and reflects a loan-to-value (LTV) ratio of around 46 percent.
The second loan is secured against two office buildings in Stuttgart and Hamburg and is for a total of €14 million. The second facility is also interest-only. It is priced at a fixed rate of 0.85 percent per year, reflects a 48 percent LTV and has a seven-year term.
Combined with a €18.2 million loan which Schroder European REIT recently sourced, secured against its Casino retail properties in France, the company has outstanding debt of €48.7 million, reflecting a LTV of 24 percent against its overall gross asset value.
The REIT said that the current blended all-in interest rate is 1.19 percent, substantially below the portfolio net initial yield against purchase price of 5.6 percent per year.
Schroder European REIT’s non-executive chairman, Sir Julian Berney, commented that the firm’s property portfolio has been geared at “very attractive financing rates”.
“The company’s overall gearing strategy is to apply debt against those assets where it is most accretive to returns, whilst maintaining the company’s maximum gearing cap of 35 percent LTV at the portfolio level and having a variety of loan maturities and debt facilities,” he added.