LONDON (Alliance News) - Invista European Real Estate Trust SICAF Friday said its net asset value per share decreased by 20% over the first six months of its financial year, due to a fall in the value of its property portfolio.
The trust also said it is exploring additional means of raising capital.
In a statement, the trust said its NAV per share decreased to EUR0.20 from EUR0.25 over the six months ended March 31. The fall came as its property portfolio was valued at EUR299.7 million at the end of the reporting period, EUR16.9 million lower than its valuation on September 30, 2013. Chairman Tom Chandos said that depressed economic conditions and weak tenant markets in the eurozone led to the fall in the portfolio's value.
"The company has made progress during the first half of the current financial year as the continued pursuit of its disposal strategy has contributed towards further reductions in vacancy, enhanced also by letting activity," Chandos said in a statement.
"This was particularly helpful in the refinancing of the portfolio, and the terms of the new credit facility are closely aligned with our ongoing disposal plans," Chandos added.
On May 1, Invista European Real Estate said it had agreed a new credit facility with Blackstone Real Estate Debt Strategies, which is an affiliate of Blackstone Group LP, in a refinancing of its previous facility with Bank of Scotland PLC. Invista European Real Estate said it is exploring further ways of raising capital to help cover its expenditure related to some of the properties in its portfolio, as the costs of refinancing its Bank of Scotland loan ate into cash reserves.
Under the terms of the Blackstone loan, Invista European Real Estate can qualify for a reduction in the interest margin it pays. The initial margin was set at 770 basis points over three-month EURIBOR but can be reduced to 470 basis points if Invista European Real Estate reduced the outstanding loan to EUR135 million and the loan to value ratio is below 70% at that point.
The loan also dictated a cash sweep to the company's income, meaning no distributions can be made to ordinary or preference shareholders, though preference share dividends will be accrued.
Invista European Real Estate shares were Friday quoted at 3.50 pence, down 3.5%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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