TIAA Henderson refinances Italian shopping centre

TIAA Henderson Real Estate has clinched a €45m loan to refinance a shopping centre in southern Italy with an investment bank.

Deutsche Bank has issued the loan secured against the Metropolis Shopping Centre in Cosenza, Italy. The 25,806 sq m centre is owned by the Henderson European Retail Fund. It replaces debt with Morgan Stanley and Deutsche Pfandbriefbank.

The Italian lending market, and the investment market in the country more broadly, has become an increasing focus of attention for investors and financiers in the past year as they look to gain exposure to risk and obtain higher returns that are becoming increasingly less available elsewhere. However, a lack of stock being sold by banks and regulatory difficulties for international lenders has meant there is yet to be a flood of activity.

Most transactions this cycle thus far have been in the north of the country where growth is at its strongest and disposable income at its highest. However, with Metropolis being in the south of the country Deutsche has been able to issue the loan at a relatively high margin, just under 400bps. In contrast, for prime assets in the north margins have now dropped below 200bps. The loan-to-value of the loan is just less than 50%.

It is thought that Deutsche Bank may look to package the loan up into a new CMBS. The Italian market has proved a popular jurisdiction for CMBS in the last 18 months with two deals already having been issued on Italian collateral this year, in part because it is difficult to syndicate there.

TIAA Henderson has been undertaking an intensive refinancing program of its European funds over the past year. Earlier this month it completed the refinancing of its €1.5bn European Outlet Mall Fund, securing a €122m loan from Deutsche Hypo for its Designer Outlet Roermond in the Netherlands.