Swedish bank SEB has provided a kr850 million (£64.4 million) loan to TH Real Estate to finance its purchase of a shopping centre in the southern Swedish city of Lund, Real Estate Capital can reveal.
TH Real Estate agreed to buy the 25,984 square metre Nova Lund shopping centre and retail park in March for TIAA-CREF, from Paris-based Unibail-Rodamco for kr1.64 billion (equivalent at the time to €176 million). The purchase, which reflected a 5.5 percent net initial yield, completed in October.
SEB has provided a seven-year fixed-rate facility, reflecting a loan-to-value ratio of around 50 percent. The loan is understood to have an all-in cost in the region of 2.5-3 percent. The deal is the first time SEB has lent to TH Real Estate.
“The debt has been designed to boost our investor’s return over the target hold period, whilst providing sufficient flexibility for the business plan to be executed,” said TH Real Estate Head of Treasury, Colin Throssell.
Finance is fairly-widely available in the Nordic market for good assets, although lenders have a limited risk appetite, Throssell said. He added: “In core locations it is a relatively deep market, with a lot of local lenders and German banks are also active. However, up the risk curve above 60 percent LTV, finance does get patchier.”
The 19,847 square metre shopping centre and adjacent 6,137 square metre retail park was constructed in 2002 and is anchored by retailers including H+M, Stadium, KappAhl and Lindex. Nova Lund is located around 20 kilometres north-east of Malmö.
The property was bought by TH Real Estate on behalf of its parent company, TIAA-CREF, and is the US insurance and pension fund’s first Nordic investment. TH Real Estate’s assets under management in the region now include four shopping centres, four retail parks and an office building.