WELPUT completes major refinancing with Wells Fargo
WELPUT (the ‘Trust’), a specialist fund investing in Central London offices, managed by Schroders and advised by Quintain Estates and Development plc, has completed a major refinancing of up to £200 million with Wells Fargo.
WELPUTi (the ‘Trust’), a specialist fund investing in Central London offices, managed by Schroders and advised by Quintain Estates and Development plc, has completed a major refinancing of up to £200 million with Wells Fargo. The new loan will be used to refinance an existing £132 million facility which has an interest rate of 5.33% and was due to mature in December 2015.
WELPUT has drawn down an initial £100 million on the new loan at less than half the interest rate of the previous loan. The loan is secured against six of the nine properties in the WELPUT portfolio.
The facility comprises the £100 million term loan already drawn together with a revolving credit facility ('RCF') of £100 million, both with a maturity of five years plus two options for one year extensions at WELPUT’s discretion. The loan structure provides significant operational flexibility in order to manage liquidity, substitute properties and implement the Trust’s stated investment strategy.
The term loan is a fixed rate loan at a rate of 1.37% plus margin. Based on a closing loan-to-value ratio of less than 20 per cent, the initial all-in interest rate on the term loan is 2.27%. The RCF is a floating rate loan and both loans carry the same margin which is ratcheted depending on LTV and, in each case, is capped at 1.40%.
Andrew MacDonald, Head of Real Estate Finance at Schroders, commented:
"This refinancing more than halves WELPUT’s interest cost whilst also providing a high level of flexibility for the continued implementation of our successful portfolio strategy. This new facility, combined with the £162 million equity raise which we completed in March, provides a strong platform from which to enhance performance returns for WELPUT’s investors."
Michael Acratopulo, Head of Origination for Wells Fargo’s London Commercial Real Estate, commented:
“We are delighted to be continuing our long standing relationship with WELPUT through this new £200m bilateral facility. We have sought to structure the financing so that it will positively assist WELPUT in its open ended format and allow the fund and its unitholders to move forward in its next stage of evolution. We look forward to WELPUT building upon its existing track record with Wells Fargo.”
For further information, please contact:
Estelle Bibby, Schroders
+44 (0)20 7658 3431 / firstname.lastname@example.org
Dido Laurimore / Ellie Sweeney , FTI Consulting on behalf of WELPUT
+44 (0)20 3727 1000
Notes to editors:
For trade press only. To view the latest press releases from Schroders go to: http://ir.schroders.com/media
West End of London Property Unit Trust (WELPUT) was established in 2001 as a closed ended property unit trust under the laws of Jersey. WELPUT was converted to a more open ended structure in 2014 with the approval of its Holders. The aim of WELPUT is to provide investors with an exposure to the central London office market. The objective is to outperform the market as measured by Investment Property Databank (IPD).
The primary investment focus is office properties in central London. Due to the nature of properties within central London there will be elements of other uses such as retail and residential. The intention is to focus the portfolio on large multi-let buildings. WELPUT is reserved for experienced investors who must be aware of the risks attaching to the investment.
The manager of WELPUT is Schroder Real Estate Managers (Jersey) Limited, one of the largest managers of Jersey Property Unit Trusts, covering various sectors of the UK market.
Quintain Estates and Development plc is the property adviser to WELPUT having acquired Grafton Advisors (2006) LLP, a partnership formed by the former senior management of Benchmark Group PLC who founded WELPUT in 2001.
Schroder Real Estate
Schroders has managed real estate funds since 1971 and currently has £11.7 billion (€15.1 billion /US$18.3 billion)ii of gross real estate assets under management as at 31 December 2014.
Most of the real estate funds referred to are unauthorised collective investment schemes as defined in the Financial Services and Markets Act 2000. Promotion of these funds is restricted and access to full information about these funds is only available to those exempt from the restriction.
For further information about Schroders’ real estate business visit www.schroders.com/realestate
Schroders is a global asset management company with £300.0 billion (EUR386.6 billion/$467.8 billion) under management as at 31 December 2014. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 37 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
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i West End of London Property Unit Trust (WELPUT)
ii Includes holdings of Real Estate Capital Partners and Schroders Multi-asset Funds in the Real Estate AUM