AEW UK REIT has refinanced with a new £60m loan to invest in new developments.
The five-year term loan facility with AgFe is fixed rate, with a total interest cost of 2.959%. The existing £54m loan facility with RBS, which is due to mature in October 2023, will be repaid in full by the new loan facility.
AEW said that, with inflation rising and interest rates set to follow suit, it was “prudent to fix the loan now, rather than run the risk of further rising rates”.
The REIT said it would use the borrowings to enhance returns over the next five years. It is expecting a large injection of cash from the sales of the East Point Business Park in Oxford and Bath Street in Glasgow.
Laura Elkin, portfolio manager, said: “This new facility with AgFe, secured against the backdrop of increasing rates, will allow the company to continue to invest and realise the strong pipeline of interesting opportunities that we are currently pursuing, while also continuing to deliver strong returns to the company’s shareholders.”
AEW added that it would be selling its interest rate cap. Its value, as of 30 April 2022, was £908,000.
AEW currently has a loan to NAV ratio of 28.26%. With the new loan facility secured, the loan to NAV will be 31.40%, in line with its its target ratio of 30-35%.
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