Hammerson announces that, together with its 50/50 joint venture partner Allianz, it has arranged a €625m seven-year term loan (Hammerson's share €312.5m) secured on Ireland's pre-eminent shopping and leisure destination, Dundrum Town Centre.
BNP Paribas and DekaBank acted as lead arrangers and Allianz Real Estate acted on behalf of a number of Allianz companies.
The facility is secured on Dundrum at a conservative leverage below 40%. The non-recourse facility is repayable in full at maturity in September 2024 and the interest cost is expected to be less than 2% (following fixing of the underlying reference swap rate).
Located in the affluent and densely populated southern Dublin catchment, Dundrum is the capital city's leading retail destination providing over 120 shops, 38 restaurants, a 12-screen cinema and 3,400 car park spaces. The 123,800 m(2) centre is 99% occupied and generates total passing rent of circa EUR66 million per annum. Dundrum is differentiated by its modern large-format flagship stores which position it to benefit from the current polarisation trends in retail and attract international brands entering Ireland.
Commenting on the transaction, Richard Sharp, Hammerson's Group Treasurer said: "Given the high calibre of the underlying asset of Dundrum Town Centre we saw strong demand for this loan and hence have secured attractive pricing at a historically low coupon. We continue to actively focus on reducing our cost of debt, benefiting from a wide range of funding sources, mostly unsecured but also secured debt in selective circumstances with our joint venture partners."
Hammerson's share of net proceeds will be used to reduce drawings under its revolving credit facilities and group LTV will be unchanged. The majority of Hammerson's financing continues to be on an unsecured basis. Post completion of this facility the ratio of secured debt to net tangible assets (which includes the Group's share of interests in Premium Outlets) will be 8%, well below the 50% covenant restriction in the Group's unsecured debt. The Group's percentage of fixed rate debt will increase on a pro forma basis from 76% at 30 June 2017 to 83% and the foreign exchange hedge of euro-denominated liabilities to euro-denominated assets of 80% at 30 June 2017 will remain unchanged.
