Following Schroder Real Estate Investment Trust’s previously announced disposal of its investment in Plantation Place on 2 May 2012, the company has now repaid a further GBP12m of debt, reducing its securitised loan from GBP163.5m to GBP151.5m. 

The repayment reduces the company’s annual loan interest cost by a further GBP0.7m from GBP9.4m to GBP8.7m and follows the previously announced debt repayment of GBP10m in April 2012.
 
As a condition of the loan repayment, on 18 July the company will break a pro-rata proportion of its interest rate swaps, crystallising a break cost of GBP1.9m and reducing the total negative mark-to-market value of the company’s interest rate swaps to -GBP24.5m.
 
The debt has been repaid from cash held inside the security pool charged to the group’s lenders, with the swap break costs to be funded from cash outside the security pool. This reduces total cash held by the group to GBP25.4m, of which GBP17.9m remains outside the security pool. Based upon the last published independent property valuation as at 31 March 2012, the company’s net loan-to-value following the debt repayment is 38 per cent.
 
Andrew Sykes, chairman of SREIT, says: “The board and investment manager continue to believe that, whilst other investment opportunities are being sought and appraised, currently, greater shareholder value can be derived from repaying debt compared with making new acquisitions.”