Shaftesbury Capital PLC on Monday said it agreed a new 10-year loan of £200 million with Aviva Investors, the global asset management business of Aviva PLC.
London- and Johannesburg-listed Shaftesbury Capital was formed in March by the all-share merger of Shaftesbury PLC and Capital & Counties Properties PLC. It is a real estate investment trust that invests in London’s West End, including Covent Garden, Carnaby, Soho, Chinatown and Fitzrovia.
The new loan will sit alongside existing secured term loans with Aviva Investors of £130 million and £120 million, which mature in 2030 and 2035 respectively.
The new £200 million loan will be secured against a portfolio of assets within the Carnaby estate in London, Shaftesbury Capital said, while the two existing loans share in the asset security of the Carnaby estate.
Shaftesbury Capital said the additional financing has been priced referencing 10-year UK gilt yields. When blended with the existing Carnaby term loans, Shaftesbury Capital said the annual cash interest rate for the aggregate £450 million of secured term loans with Aviva Investors will be 47%.
The proceeds of the facility will be used to partly repay Shaftesbury Capital’s £576 million unsecured loan, which was drawn in April 2023 to fund the repayment of the Shaftesbury PLC secured bonds.
As a result, Shaftesbury Capital said the weighted average maturity of drawn debt will be extended to five years, with the weighted average cost of debt being 4.2%, reducing to an effective cash cost of 3.3% when considering interest income on cash deposits and the benefit of interest rate hedging.
Shaftesbury Capital said the financing demonstrated a ‘continuation of the strong relationship’ with Aviva Investors and underlines the attractiveness of the company’s property portfolio to a broad range of institutional capital.
Chief Financial Officer Situl Jobanputra said that the move enhanced Shaftesbury Capital’s debt maturity profile.
Aviva Investors Head of Real Estate Debt Gregor Bamert commented: ‘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.’
Shares in Shaftesbury Capital were down 0.7% to 123.20 pence each in London on Monday at the open.
Earlier this month, Shaftesbury Capital reported a swing to interim profit on the back of strong leasing demand, high occupancy and rental growth.
For the first half of 2023, pretax profit was £799.1 million, swung from a loss of £5.9 million a year earlier. Revenue doubled to £82.4 million from £35.9 million, with net rental income soaring to £58.3 million from £26.9 million.
The vacancy rate was 5.9% as at June 30. Some 220 leasing transactions were completed in the first half.
Shaftesbury Capital declared an interim dividend 1.5 pence, up 88% from 0.8p.
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