Shaftesbury Capital has secured a new long-term loan of £200million from Aviva Investors as the West End landlord looks to repay other debts.
The group, formed in March through a £5billion mega-merger between Shaftesbury and Capital & Counties, said the fresh financing highlighted ‘the attractiveness’ of its ‘exceptional portfolio’.
Earlier this month Shaftesbury Capital reported sales above pre-pandemic levels as tourists flocked back to areas like Chinatown and Covent Garden, which are part of its property estate.
Rebound: Shaftesbury Capital has been boosted by a rebound in international visitors to areas like Chinatown and Covent Garden, which are part of its property estate
Commercial property firms were hit hard by the pandemic, as its tenants – shops, bars and other businesses – had to shut down for months on end, struggling to pay rent.
More recently, they have suffered from rising interest rates, which have resulted in higher borrowing costs and pushed down the capital values of commercial buildings.
Shaftesbury Capital said it will use the new loan facility to help repay an unsecured loan it took out in April to repay secured bonds.
The fresh financing is in addition to two other loans with Aviva Investors of £130million and £120million, which mature in 2030 and 2035 respectively.
The three loans are secured against a portfolio of assets within the company’s £1.5billion Carnaby estate.
Shaftesbury will pay an annual interest rate of 4.7 per cent on the total amount of £450million, it said.
The effective cash cost of net debt will be 3.3 per cent, which is better than analysts’ forecasts of 3.6 per cent.
Analysts at Peel Hunt said the fresh loan ‘reinforces the quality of the portfolio, providing further certainty to cashflows and capital availability’.
Gregor Bamert, head of real estate debt at Aviva Investors, said: ‘We have a strong conviction on well-curated and thriving locations, managed by market leading clients, of which the Carnaby estate and Shaftesbury Capital are both compelling examples.’
Shaftesbury Capital’s chief executive, Situl Jobanputra, said the deal ‘enhances the Company’s debt maturity profile and highlights the attractiveness of our exceptional portfolio’.
Shaftesbury Capital shares were 0.3 per cent higher at 123.9p in morning trading on Monday.
Peel Hunt analysts said: ‘We continue to see the shares as highly attractive, giving investors the opportunity to access world class real estate at an implied 25 per cent discount to the prevailing private market price.
‘The shares look set to offer a c.3 per cent dividend yield, which is reinforced by this successful refinancing.’
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