SEGRO has arranged EUR208 million of bank funding for SEGRO European Logistics Partnership (SELP), in which SEGRO owns a 50 per cent interest.
The additional funding supports the acquisition of EUR472 million of prime logistics assets in Germany, Poland and France.
The acquisition, the final element of which was completed on 30 June 2014, is consistent with SEGRO’s objective to increase its exposure to the Continental European logistics market in conjunction with third party capital.
The debt is structured within three separate secured bank facilities (the last of which has been recently finalised) as follows:
1) A new five year EUR139 million German debt facility with pbb Deutsche Pfandbriefbank and Helaba as lenders. This facility comprises EUR114 million of drawn term debt and EUR25 million of undrawn facilities to be utilised in connection with future development projects;
2) EUR41 million of term debt as an increase to the EUR188 million five year SELP debt facility (also with pbb Deutsche Pfandbriefbank and Helaba as lenders) put in place in October 2013 in respect of SELP assets in Poland and the Czech Republic; and
3) EUR28 million of term debt as an increase to the EUR140 million seven year SELP French debt facility arranged in October 2013 with Aareal Bank.
The newly outstanding debt provides a weighted average loan to value ratio of around 39 per cent on the portfolio acquisition value and is structured as fixed rate loans with a weighted average blended margin of 1.6 per cent and a weighted average blended total cost (excluding amortisation of up-front fees) of 2.2 per cent p.a. over the life of the facilities.
Justin Read, SEGRO group finance director, says: “We are very pleased to have had the opportunity to work with the existing SELP lending banks to put in place such cost effective debt funding for our recent portfolio acquisition.
“These financings are consistent with SELP’s funding objective to enhance returns through low cost debt whilst maintaining a moderate level of financial leverage.”