Lar Espana Real Estate Socimi, the listed real estate investment company, has successfully secured financing agreements totalling €103.9m, which will allow it to acquire new assets over the coming months. These agreements have been signed with ING and BBVA.
Lar Espana’s total debt now stands at €558m, of which €418m corresponds to bank loans and the remaining €140m to a bond issuance completed at the start of 2015, the first carried out by a Socimi in Spain. Lar Espana’s net LTV currently stands at 33% of its gross asset value; once the new funds have been invested this will rise to circa 38%, leaving the company room, more specifically until the 50% mark is reached, for further additional leverage, one of its key strategic objectives.
The newly signed agreements lower the Socimi’s financing costs to 2.2%. The average maturity for the financing now stands at 5.9 years and the debt is 81% hedged via various financial instruments, thereby reducing its interest rate exposure. Sergio Criado, CFO of Lar Espana, highlighted that “the financing agreements that we have just achieved are testament to the financial system’s confidence in our company’s business plan, and allow us to both reduce the cost of debt and assuredly take on our portfolio expansion.”
The financing agreements that have been reached are linked to the two most important assets acquired by Lar Espana in 2016. The Gran Vía de Vigo shopping centre, acquired in September 2016 and which towards the end of last year was booking rental income of almost €10m, and the Vistahermosa shopping centre, which was acquired in June 2016 and saw Occupancy rates rise from 80% to 90% in the space of just six months. Lar Espana Real Estate owns 29 real estate assets valued at €1,275m, of which; €961.6m relate to fourteen retail schemes located in Madrid, Vigo, Valencia, Seville, Alicante, Cantabria, Lugo, León, Vizcaya, Navarre, Guipúzcoa, Palencia, Albacete and Barcelona; €171m to the purchase of four office buildings in Madrid and one in Barcelona; €76.5m to four logistics properties in Guadalajara and one in Valencia; and €65.8m to one residential asset in Madrid.
