TIAA Henderson Real Estate (TH Real Estate) refinanced its maturing debt secured by against phases one and two of Designer Outlet Parndorf in Austria with a two-tranche €54.7m five-year senior loan with Deutsche Pfandbriefbank (PBB).
PBB, which jointly provided the matured €39.2m financing split 50:50 with WestImmo, has refinanced Designer Outlet Parndorf, owned through TH Real Estate’s €1.5bn European Outlet Mall Fund with a part investment loan, part capex facility.
This is the second refinancing PBB has closed for the European Outlet Mall Fund in the last three months after closing a a five-year €67m senior loan for the fund’s Designer Outlet Berlin – at circa 160 bps over five-year swap rate – in June.
Broadly, the new Designer Outlet Parndorf five-year loan is approximately €39.2m investment loan and €14.5m capex facility, at a margin of sub 160 basis points over three-month Euribor plus the five-year swap rate, currently at circa 0.6%. This implies an all-in cost of sub 2.2%.
TH Real Estate’s European Outlet Mall Fund, which owns 8 outlet mall assets across Europe as well as three UK outlet mall assets via an investment in the UK Outlet Mall Partnership, secured a 10-year fund life extension in April.
The financing will provide the capital to undertake asset management at the property and work towards the development of a new phase at the scheme, which is expected to open in 2016.
In total, the European Outlet Mall Fund has six loans with an outstanding balance of less than €500m secured against its underlying shopping centre portfolio, approximately valued at €1.5bn.
TH Real Estate has three further maturing loans which are earmarked for refinancing before the end of the year, however, the fund manager is contemplating rebalancing the equity and debt proportions, in line with its business plans for the assets, therefore like-for-like refinancings are not expected.
Designer Outlet Parndorf is located 30 minutes from Vienna centre, and 25 minutes from Bratislava. The centre hosts designer stores including Armani, Gucci, Polo Ralph Lauren and Michael Kors.
In a statement, Colin Throssell, Head of Treasury, said: “Just as with our recent Berlin refinancing, also with PBB, this is great result for the Fund and its investors, representing another milestone in what is a very eventful year. We have now successfully navigated the Fund extension and completed two re-financings during 2014 alone.
“There are still a number of additional short-term financing requirements for us to work through but with the support of our long standing relationship Banks and the interest of many other market participants, we are well positioned to secure extremely competitive terms for the fund, as we did in this instance.”
Charles Balch, head of real estate finance international, UK & CEE at Deutsche Pfandbriefbank, added in the statement: “We are delighted to have provided TH Real Estate and the Fund with these two refinance facilities for the Parndorf and Berlin designer outlet centres. These two transactions are a prime example of PBB’s ability to provide local financing for its international clients across its pan-European network.”