SWEF: Quarterly update of the portfolio -3-


On the hotel transaction side, we mentioned in previous files that we expected many hotel transactions to materialize later in the year. Since that time last year, Starwood Equity in Europe has acquired or committed to four new hotel purchases in the UK, Spain and Denmark, including two in the third quarter of 2021. In the US In early summer, funds managed by Starwood and Blackstone finalized the acquisition of Extended Stay America in a transaction valued at approximately $ 6 billion. We previously reported that markets tended to open up with smaller single asset trades first, and then migrate to larger trades and portfolios as markets settle. We are now seeing this trend in the market with larger trading portfolios increasing the overall trading volume. One example this month in the UK is Henderson Park has acquired a portfolio of twelve Hilton hotels with more than 2,400 rooms in a transaction valued at an estimated £ 555 million. We are aware of a number of similar sized transactions in the market which will likely close in late 2021 or early 2022. The investment market is very healthy and liquid for hotel assets across Europe.

Looking forward to the fourth quarter and beyond, we expect a high level of transactional activity to continue. The strength and potential of “beds, medications and remittances” have been strong themes and we continue to see attractive value-added lending opportunities in these and other sectors for the Company.

Expected credit losses

All loans in the portfolio are classified and measured at amortized cost less impairment. The Group closely monitors the loans in the portfolio to detect a deterioration in credit risk. There are certain loans for which the credit risk has increased since initial recognition. However, we have considered a number of scenarios and currently do not anticipate a loss given default. Therefore, no credit loss has been recognized.

This assessment was made, despite continued pressure in the hospitality and retail markets from Covid-19, based on the information in our possession as of the date of the report, our risk assessment of each loan and certain estimates and judgments regarding the future performance of the assets. The position on possible ECL on Spanish retail assets in particular continues to be closely monitored and analyzed, and we have sought input, analysis and comments from Spanish market advisers in this regard, in order to supplement our own information. We have received independent external assessments of the underlying assets secured by the Spanish loans during the current year. This information has not changed our analysis of Spanish bonds and we note that a valuation margin remains on these borrowings. The updated valuations are reflected in the sector and portfolio LTV tables presented in this sheet.

Investment portfolio as of September 30, 2021

As of September 30, 2021, the Group had 18 investments and commitments of £ 419.1 million broken down as follows:

                             Sterling equivalent       Sterling equivalent unfunded        Sterling Total (Drawn and 
                             balance (1)               commitment (1)                      Unfunded) 
Hospitals, UK                GBP25.0 m                                                       GBP25.0 m 
Hotel & Residential, UK      GBP49.9 m                                                       GBP49.9 m 
Office, Scotland             GBP5.0 m                                                        GBP5.0 m 
Office, London               GBP13.7 m                   GBP6.8 m                              GBP20.5 m 
Hotel, Oxford                GBP20.1 m                   GBP2.9 m                              GBP23.0 m 
Hotel, Scotland              GBP41.4 m                   GBP1.2 m                              GBP42.6 m 
Hotel, Berwick               GBP14.1 m                   GBP0.9 m                              GBP15.0 m 
Life Science, UK             GBP19.5 m                   GBP7.1 m                              GBP26.6 m 
Hotel and Office, Northern   GBP13.5 m                                                       GBP13.5 m 
Logistics Portfolio, UK (2)  GBP0.6 m                                                        GBP0.6 m 
Total Sterling Loans         GBP202.8 m                  GBP18.9 m                             GBP221.7 m 
Three Shopping Centres,      GBP31.0 m                                                       GBP31.0 m 
Shopping Centre , Spain      GBP14.7 m                                                       GBP14.7 m 
Hotel, Dublin                GBP51.8 m                                                       GBP51.8 m 
Office, Madrid, Spain        GBP16.0 m                   GBP0.9 m                              GBP16.9 m 
Mixed Portfolio, Europe      GBP24.1 m                                                       GBP24.1 m 
Mixed Use, Dublin            GBP4.6 m                    GBP8.2 m                              GBP12.8 m 
Office Portfolio, Spain      GBP13.4 m                   GBP0.2 m                              GBP13.6 m 
Office Portfolio, Ireland    GBP27.4 m                                                       GBP27.4 m 
Logistics Portfolio, Germany GBP5.1 m                                                        GBP5.1 m 
Total Euro Loans             GBP188.1 m                  GBP9.3 m                              GBP197.4 m 
Total Portfolio              GBP390.9 m                  GBP28.2 m                             GBP419.1 m 1. Euro balances translated to sterling at period end exchange rate. 2. Logistics Portfolio, UK and Logistics Portfolio, Germany is one single loan agreement with sterling andEuro tranches. 

Ready to value

Based on the previously disclosed valuation methodology and processes (see information sheet of June 30, 2020) and including new valuations received, as of September 30, 2021, the Group has an average last GBP LTV of 64.2 for percent (June 30, 2021: 63.5 percent).

The table below shows the sensitivity of the debt-to-value calculation to variations in the underlying real estate valuation and shows that the Group has considerable leeway within the latest LTVs currently published.

Change in Valuation  Hospitality Retail Residential Other Total 
-25%                 84.2%       100.5% 79.5%       79.3% 84.1% 
-20%                 78.9%       94.2%  74.6%       78.3% 80.2% 
-15%                 74.3%       88.6%  70.2%       73.7% 75.5% 
-10%                 70.1%       83.7%  66.3%       69.6% 71.3% 
-5%                  66.4%       79.3%  62.8%       65.9% 67.6% 
0%                   63.1%       75.3%  59.7%       62.6% 64.2% 
5%                   60.1%       71.8%  56.8%       59.7% 61.1% 
10%                  57.4%       68.5%  54.2%       57.0% 58.3% 
15%                  54.9%       65.5%  51.9%       54.5% 55.8% 

Share price performance

In the third quarter of 2021, the Company’s shares performed well, returning 5.8% on a total return basis, with the share price trading between 92.8 pence and 99.4 pence. pence and closing the quarter at 98.0 pence. As of September 30, 2021, the discount to NAV was 5.4% percent, with an average discount to NAV of 7.0% percent for the quarter, a significant improvement over the discount to NAV of 12.1% per cent on average during the previous quarter. The Board of Directors, Investment Manager and Adviser continue to believe that equities represent attractive value at this level.

Note: The September 30, 2021 discount to the NAV is based on the current September 30 NAV as shown in this fact sheet. All average net asset value discounts are calculated as the last cumulative net asset value available in the market on any given day, adjusted for any dividend payment from the ex-dividend date.

For more information, please contact:

Apex Fund and Corporate Services (Guernsey) Limited as Company Secretary

                                  +44 (0) 203 5303 661 
Magdala Mullegadoo 
Starwood Capital 
Duncan MacPherson                +44 (0) 20 7016 3655 
Jefferies International Limited 
Stuart Klein 
Neil Winward 
                                 +44 (0) 20 7029 8000 
Gaudi Le Roux 

Buchanan +44 (0) 20 7466 5000

Hélène Tarbet +44 (0) 07788 528143

Henri wilson

Hannah ratcliff


Starwood European Real Estate Finance Limited is an investment company listed on the premium segment of the main market of the London Stock Exchange with an investment objective of providing Shareholders with regular dividends and an attractive total return while limiting downside risk. , through the origination, execution, acquisition and service of a diversified portfolio of real estate debt investments in the United Kingdom and in the internal market of the European Union at large. www.starwoodeuropeanfinance.com.

The Company is the largest publicly traded vehicle in London offering investors outright exposure to mortgage loans.

The Group’s assets are managed by Starwood European Finance Partners Limited, an indirect wholly-owned subsidiary of Starwood Capital Group.

————————————————– ————————————————– ——————-

ISIN:          GG00B79WC100 
Category Code: MSCM 
TIDM:          SWEF 
LEI Code:      5493004YMVUQ9Z7JGZ50 
Sequence No.:  124950 
EQS News ID:   1242678 
End of Announcement  EQS News Service 

Image link: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1242678&application_name=news

(END) Dow Jones Newswires

October 22, 2021 05:16 ET (09:16 GMT)


About Wanda Dufresne

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