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(Alliance News) - Starwood European Real Estate Finance Ltd on Friday said its recent share price tumbles have more to do with market sentiment tumbling due to the Covid-19 spread, and is not related to its financial position.
The investment company said it has no impairments and at February 28, it had net debt of GBP16.5 million, which is equal to 3.9% of its net asset value.
"As such, the company considers that the recent share price movements have been driven by market conditions and flows as opposed to a significant change in the company's fundamental value or outlook," Starwood said.
The company allowed that 31% of its invested assets are in the virus-hit hospitality sector. The firm said it expects the sector to see a "negative impact in operational performance".
Starwood added: "In common with similar crises of the past such as the 9/11 terror attacks and during the SARS virus scare, the market will see a particularly difficult hospitality trading period.
"Whilst this negative impact is expected across the hospitality sector in the near term, the company's investment manager is confident in the fundamentals of the markets in which the assets are located and the borrower's business plans for the assets over the medium to long term."
Starwood shares were 12% higher at 71.15 pence each in London on Friday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
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