UK REIT Hansteen refinances €343m German loans

London-listed REIT Hansteen Holdings, which specialises in UK and European industrial property, said earlier this month that it had managed to refinance two loans secured against its German portfolio with two new loans totaling €343 million.

Hansteen’s UniCredit loan, due for repayment in February 2015, has been refinanced with a €235 million five-year facility provided by a consortium of lenders including Landesbank Hessen-Thüringen Girozentrale (Helaba), Natixis Pfandbriefbank AG, SEB AG and various subsidiaries of AXA REIM SGP. The loan-to-value ratio is 51% with hedging against 80% of the loan, resulting in an interest cost of 3.5% per annum excluding fees.

The second loan from Lloyds Banking Group, due to expire in October 2014, has been refinanced with a €108 million five-year facility from HSBC plc at a loan-to-value ratio of 48%. The Company has hedged €55 million of the loan with an interest rate swap, resulting in an average interest cost of 2.9% per annum, excluding fees.

Ian Watson, joint founder and CEO of Hansteen, commented: “It is a testament to the strength of our business model that we have been able to raise two substantial new loans on multi-let industrial property in Germany. The terms equate to less than 4% per annum gross interest costs, including amortised fees, and we are delighted with our new banking relationships.”

On a more general note, in its recent outlook for its markets issued with its full-year results, Watson and fellow-CEO Morgan Jones commented, “The second half of 2013 saw the investment and funding markets change significantly for the better, following five years of decline and poor liquidity. This is particularly true in the UK with growing signs that the investment market in Germany will follow a similar path, in time. At the same time, in each of our regions the occupational market is improving.”

Hansteen invests in predominantly industrial properties across Germany, Benelux, France and the UK, with high yields, low financing costs and opportunity for value improvement, according to the company’s own description. At 31st December 2013, the portfolio under management comprised 4.1 million sq m and was valued at over £1.5 billion. Germany currently accounts for 55% of Hansteen's wholly-owned property portfolio with over 1.5 million sqm valued at approximately €680 million.