A corporate governance exercise triggered directors of an AIM listed property fund to audit finance options
on a geographically diverse spread of property assets
- £91 million commercial property fund
- First charge over commercial property portfolio
- From rental of all properties
- £55m finance
- 60% LTV, 5 year term
- Varied asset locations
- Low WAULT
- Flexibility around right of substitution
- 5 year term
- 60% LTV
- Top tier bank
An AIM listed property fund required refinance of a £91m property portfolio, following a corporate governance exercise.
While the existing lender was supportive and had provided renewal terms, the non-executive directors sought an independent review of the current finance structure. In addition, the finance director was interested to know if the LTV had been fully optimised.
The geographical spread of the assets, as well as a low WAULT score, presented challenges when approaching lenders, however a 5 year term facility was secured at sub 200 bps margin (over BoE) with a top tier bank at 60% LTV. This not only saved more than £1.8m, it released additional equity of £5m for future investment.