Cornerstone concludes the refinancing of its €1 billion Nordic Retail Fund (SE)

Cornerstone Europe, announced that, having closed a new €240 million term loan with pbb Deutsche Pfandbriefbank AG and Skandinaviska Enskilda Banken AB (SEB), it has successfully closed €560 million of new senior loans in just over seven months for its Nordic Retail Fund, a €1 billion collective investment property fund investing in a portfolio of retail assets in Finland and Sweden.

The proceeds of these loans have been used to refinance the portfolio and provide fresh capital for the value enhancing asset management initiatives and capital expenditure programs Cornerstone Europe is currently undertaking across the portfolio. Cornerstone Europe also closed a mezzanine loan facility arranged by DRC Capital, which can be used to balance NRF’s capital requirements across its asset base.

This latest loan follows the successful completion of a €60 million facility, signed in June with SEB and Ilmarinen Mutual Pension Insurance Company, in relation to two shopping centers located in Rovaniemi and Lappeenranta in Finland.

At the end of 2012, Cornerstone Europe closed a new €260 million loan facility arranged by the Danish Mortgage Bank Nykredit Bank A/S and secured on the Kamppi shopping center, which is considered the leading shopping center in downtown Helsinki, Finland, and is also the largest shopping center asset in NRF.

Charles Weeks, Chief Executive Officer at Cornerstone Europe, stated: “Since taking over the asset management of the Nordic Retail Fund in mid-2011, we have successfully completed a number of asset management and capital expenditure initiatives. By leveraging our in-house expertise to stabilize the Fund and by concluding this recent refinancing we are in a strong position to deliver shareholder value.”

Adrian Ion, Director Fund Operations and European Finance at Cornerstone Europe commented: “Over the years we have developed significant in-house debt finance expertise. This, coupled with our institutional investor base and our strong relationships with the banking community, has allowed us to refinance a large amount of debt in a volatile market environment at a blended cost of around 4%. We are delighted with the result we have achieved for NRF and we are very pleased with the support provided by our lending partners.”

James Whittaker, Director Fund Management at Cornerstone Europe added: “Our local asset management teams provided valuable support to the refinancing process. They demonstrated the significant progress we have made on the portfolio since assuming the role of asset manager to NRF, mid-2011. We are in the process of implementing a number of large value-add capital expenditure initiatives for NRF, including wholesale refurbishments at three Swedish shopping centers in down-town Västerås and Nyköping, for which we have agreed terms with a number of strong Nordic tenants. Our value-add capital expenditure programme, coupled with our strong asset management and investment expertise in the region, should provide NRF investors with a strong platform for future income and capital growth.”

Norbert Müller, Head of Real Estate Finance Continental Europe West at pbb Deutsche Pfandbriefbank said: “For pbb Deutsche Pfandbriefbank, Scandinavia is an attractive market, demonstrated by the opening of our Stockholm Branch in September last year. I’m therefore happy to announce yet another deal closed. We are pleased to support Cornerstone Europe, being such a significant client with a large commitment and strong local presence in the Nordic markets.”

The Nordic Retail Fund is a €1 billion collective investment property fund investing in retail assets in Finland and Sweden. It currently invests in 14 retail assets in Sweden and three large shopping centers in Finland, with a total lettable area of 3 million ft².

Source: Cornerstone

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