Hansteen rescues UniCredit loan with GPT portfolio buy

UniCredit has salvaged a €300m loan on the former GPT Halverton portfolio of German industrial property by selling the portfolio to UK REIT Hansteen. Hansteen has exchanged on a deal to buy the 34 properties totalling 860,000 sq. m which are 24% vacant, for just €4.

But it is effectively taking on the liabilities, by amending and restating the old UniCredit loan secured on the portfolio at the previous €300m loan size. The portfolio’s former owner, GPT Halverton, bought the properties in 2007 for €440m, originally in a joint venture with the now bankrupt Babcock & Brown, and has had its equity wiped out.

On completion of the deal next month, Hansteen will pay down €40m of the loan. It will also pay around €30m to break a swap hedging the loan, and re-hedge at mark-to-market levels, halving the coupon from 4.5% to around 2.3%.

The loan-to-value ratio is very high, but there is interest cover of more than times two, giving Hansteen freedom to sell assets. The industrial specialist said its aim is to sell assets and reduce the gearing. A source said Hansteen has got the debt on almost identical terms to the original loan, for five years, at 110 basis points over Euribor, at a time when such a portfolio would be near impossible to refinance.

UniCredit director Trevor Homes agreed that the loan terms were soft, but said: “We had a portfolio where arrears were rising and there had been a lack of spending. Now we have a very stable owner/manager; we have cut our bulk exposure by paying off €40m of debt; and changing the coupon on the swap improves the interest cover and gives huge headroom. “The pricing has remained at under 200bps, but that more than covers the banks’ underlying cost of funds.”

Co-operative effort turned debt around

UniCredit bought the GPT Halverton loan in December 2007, jointly with JP Morgan, from Barclays Capital, which had planned to securitise it. JP Morgan later sold most  of its holding to Austrian bank Hypo Invest. UniCredit now owns 70%, Hypo Invest 24% and JP Morgan 6%.

UniCredit’s Trevor Homes said: “In mid 2009, GPT decided to get out of Europe and sell its European asset management platform. It told us that it wouldn’t put any  more money into this deal. The portfolio needed capital expenditure and vacancy rates were rising.  “We were concerned about our borrower’s decisions, so  we worked with GPT’s London team, which brought in CB Richard Ellis as an adviser to find a buyer at the level of the existing debt.

“Everyone was co-operative and supportive. Hansteen has acquired a portfolio of critical mass with stapled debt, while GPT had burned through all  of its equity, but worked to support the sale and keep the properties going for an asset management fee, when it could have given us back the keys. “CBRE and Internos [which bought the GPT Halverton fund management platform] are managing the properties in the interim.”