Hercules Unit Trust, the specialist retail warehouse fund managed by Schroder Property and advised by British Land* has signed a new £350 million five year loan facility provided by Lloyds TSB Bank PLC ('Lloyds'), Metropolitan Life Insurance Company ('MetLife') and The Royal Bank of Scotland plc ('RBS').
The £250 million term loan, provided in equal shares by MetLife and RBS, will be used to fully repay the existing credit facility three months before it expires in October 2012. The interest rate on the term loan has been swapped to a fixed rate, resulting in an all-in rate including margin and arrangement fees below the fixed interest rate under the existing financing.
A further £100 million revolving loan has been provided by Lloyds and will provide flexibility for Hercules in respect of acquisitions, capital projects, disposals and general business purposes.
Lloyds, MetLife and RBS acted as Arrangers of the new facility and RBS acted as Co-ordinator. Lloyds will act as Facility Agent and Security Agent.
When combined with the £350 million financing signed in September 2011 and the £150 million financing signed by The Gibraltar Limited Partnership** in March 2012, Hercules and its joint venture partners have now successfully raised £850 million of loan facilities within the last nine months. These will be used to refinance maturing facilities and provide funding for future capital projects, including extensions to a number of retail parks in the Hercules portfolio.
As a result of these financings, the weighted average interest rate of Hercules' share of gross debt has reduced from 6.0% pa in September 2011 to 3.8% pa assuming that the revolving elements of the new facilities are fully drawn.
* British Land has a 41% interest in Hercules Unit Trust
**Joint Venture 50% owned by HUT
Sally Jones, British Land 020 7467 2942
Pip Wood, British Land 020 7467 2838
Guy Lamming, Finsbury Group/ 020 7251 3801
Gordon Simpson, Finsbury Group
Notes to Editors
About British Land
British Land is one of Europe's largest Real Estate Investment Trusts (REITs) with total assets, owned or managed, of £15.8 billion (British Land share £10.3 billion), as valued at 31 March 2012. Through our property and finance expertise we attract experienced partners to create properties and environments which are home to over 1,000 different organisations and visited by over 300 million people each year. Our property portfolio is focused on prime retail locations and Central London offices which attract high quality occupiers committed to long leases. Our occupancy rate of 98.0% and average lease length to first break of 11.3 years are among the highest of the major UK REITs.
Retail assets account for 61% of our portfolio, over 80% of which are located at prime out-of-town sites. Comprising around 27 million sq ft of retail space across 90 retail parks, 99 superstores, 12 shopping centres and 10 department stores, the retail portfolio is modern, flexible and adaptable to a wide range of formats. Our active asset management delivers space which is attractive and meets the needs of both retailers and consumers.
London offices, located in the City and West End, comprise 34% of the portfolio which will rise to an estimated 40% on completion of current developments. Our 7 million sq ft of high quality office space includes Broadgate, the premier City office campus (50% share) and Regent's Place in the West End. We have committed £1.2 billion to create Central London's largest committed office development programme which will deliver 2.3 million sq ft of high quality space by 2014, including a 700,000 sq ft building at 5 Broadgate, the 610,000 sq ft Leadenhall Building in London's insurance district and a 500,000 sq ft mixed office and residential scheme at Regent's Place in the West End.
Our size and substance demands a responsible approach to business and we focus on five areas which matter most to us and our key stakeholders: managing buildings efficiently; developing sustainable buildings; enhancing biodiversity; exceeding customers' expectations and focusing on local communities. We believe leadership on issues such as sustainability helps drive our performance and is core to our corporate vision of building the best REIT in Europe.
Schroders has managed property funds since 1971 and has £10.2 billion (EUR 12.2 billion / US$ 16.3 billion) of gross property assets under management (at 31 March 2012) and has around 100 property staff located in 9 offices across the UK and Europe. All of the property 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.
Schroder Property Investment Management Limited is authorised and regulated by the Financial Services Authority
About Hercules Unit Trust
Hercules Unit Trust (HUT) is a Jersey-based closed-ended property unit trust with a fixed life which has been extended to 2020, and is subject to further extension with unit holder consent. HUT's primary investment focus is major retail warehouse or shopping park properties with a value in excess of £20 million in the United Kingdom and, in particular, those properties that dominate their catchment area, offer a critical mass of retailing and, where possible, have the benefit of Open A1 planning consent. HUT is the UK's largest specialist retail warehouse property unit trust with a portfolio of £1.6 billion. As at 31 December 2011, the Trust owned and managed 21 retail and shopping parks, including Glasgow Fort Shopping Park in Glasgow and Fort Kinnaird Shopping Park in Edinburgh, providing around 4.5 million sq ft of retail park space. Key tenants include Next, Boots, Arcadia, Marks & Spencer, Walmart, Kingfisher Group, DSG, JJB Sports and New Look.
British Land is HUT's property adviser and Schroder Property Managers (Jersey) Ltd is the Fund Manager.
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