TIAA Henderson Real Estate has secured a five-year €67m senior loan from Deutsche Pfandbriefbank (PBB) for its €1.5bn European Outlet Mall Fund in the first of a string of refinancings for the flagship shopping centre fund this year.
PBB’s five-year senior loan was secured at an all-in cost of debt of c.2.3% and is secured against the Designer Outlet Berlin. Working back from the current five-year euro swap rate, which is at 0.7%, this implies a senior loan margin of circa 160 basis points over three-month Euribor.
Colin Throssell, head of treasury, at TH Real Estate, said in a statement: “The new financing we have arranged and executed is a great result for the Fund.
“The fact that we have further extended our relationship with a bank that understands the Fund and its assets offers great stability, whilst our ability to lock-in historically low finance costs for a five year period will aid the Fund in delivering strong returns to its investors.
“It gives us enormous confidence as the ‘first step’ in finalising the other near term re-financing requirements of the Fund.
Designer Outlet Berlin, located in the Berlin Brandenburg region on the western edge of Berlin, was acquired in two stages in 2006 and 2008 when the entire site was then redeveloped, with the latest phase opening in 2010.
The centre totals c.21,000 sq m of GLA across 90 retail units and is anchored by Hugo Boss, Joop!, Strellson, Nike, Tommy Hilfiger and Adidas.
Later this year, TH Real Estate will seek to refinance further maturing loans within the fund which has an aggregate outstanding debt balance of sub €600m, or just under 40% LTV. The fund’s dominant lenders comprise PBB, ING Real Estate and, to a lesser extent, Credit Agricole.
The PBB refinancing comes shortly after the 10-year “extension” of the €1.5bn flagship European Outlet Mall Fund which owns eight outlet mall assets across Europe, in addition to its indirect holding in three UK outlet mall assets.
Sebastien Gorrec, fund manager at TH Real Estate, said: “The successful refinancing and restructuring of external debt is an essential part of the medium-term strategy of the Fund, and provides the team with the foundations to deliver value adding asset management initiatives.
“The rate secured is testament to the confidence and strength of prime outlet mall centres across Europe. We work closely with our Treasury team and are benefiting from the excellent relationships that we have with a variety of lenders, across all of the various property funds at TIAA Henderson Real Estate.”