Pillar Property announced today that it has restructured £375m of loans financing three of its principal retail parks, in conjunction with Hypovereinsbank.
The existing loans on these parks have been replaced with “conduit financing”, an innovative financing technique which uses “securitisation conduits.”
Humphrey Price, finance director of Pillar, said: “For some time, we have been reviewing various securitisation opportunities for Pillar’s retail park portfolio, but have been deterred by factors such as the cost and relative inflexibility involved with this method of financing.
“The deal, arranged by HVB Real Estate Capital, provides a way for us to achieve a price-efficient and flexible alternative to the existing loan funding for some of our parks, without the constraints of securitisation per se.”
The cost of unwinding some of the original debt facilities, together with associated hedging, was approximately £13m and it is expected that annual savings on the cost of debt, as a direct result of the new financing facilities, will be £3m.
The initial period for the funding is nine years and the loan is capable of being transferred with the properties, at minimal cost, into Hercules Unit Trust.
The three parks covered by this new financing are: Fort Kinnaird, Edinburgh; Broughton Park, Chester and the Deepdale Retail Park, Preston, totalling approximately 1.2m sq ft (111,480 sq m).
All three parks are wholly-owned by Pillar.
EGi News 06/11/01
