Barclays has provided financing at a margin as tight as 175 basis points for low leverage on “good quality kit” for its long-standing client, Tritax.
The bank has issued three separate loans totalling £85m for Tritax’s new REIT, Tritax Big Box REIT, listed last December, to re-gear the purchase of UK distribution centres in the East Midlands, North Yorkshire and Oxfordshire.
The assets, purchased in December 2013 and April this year, are let to Marks & Spencer, Sainsbury’s and Tesco respectively, to which facilities of £49.3m; £23.5m; and £12.2m have been attached.
The debt secured against the Sainsbury’s distribution centre is priced at 175 bps for a term of four years initially, and reflects a loan-to-value of about 48%.
The Tesco debt is for four years, also extendable, on a 45% LTV. It cost 185 bps.
The five-year M&S loan has the option for a further one-year extension, at 59% LTV. The margin was 200 bps.
“The borrower didn’t want their debt all maturing at the same time”, explained Gregor Bamert, head of Barclays Real Estate London. “Since launching an IPO the company has gone out and bought a number of assets relatively quickly; in the interest of speed and getting individual deals done we provided a simple asset by asset financing.”
Barclays first worked with Tritax, financing its 2009 acquisition of Brindleyplace in Birmingham. Bamert called this latest deal a “plain vanilla transaction”.
He said: “These are good quality assets on nice leases let to investment grade tenants. It’s good quality kit to a good quality sponsor so pricing is tight”.