Elite Commercial REIT secures up to S$229.73M refinancing fund

SINGAPORE: The manager of the first UK-focused Singapore REIT, Elite Commercial REIT, secures up to S$229.73 million (GBP 135 million) in refinancing funds from a group of financial institutions, The Edge Singapore reports.

Although the manager has not disclosed the specific lenders in the filing made on March 4, it has indicated that these “new lending relationships” were established through the REIT’s sponsors.

The allocated funds will be used to refinance the REIT’s existing loan facilities. Structured over a three-year term and revolving credit facilities, this move is expected to enable the manager to “efficiently manage its working capital”.

As of Dec 31, 2023, the REIT’s gearing was recorded at 47.5%. However, following a preferential offering worth S$47.65 million (GBP 28 million), which concluded on Jan 18, the gearing ratio decreased to 40.9%.

This adjustment also resulted in a S$95.13 million (GBP 55.9 million) debt headroom, calculated based on a 50% limit.

Moreover, as of Dec 31, 2023, approximately 66% of the REIT’s borrowings were hedged on fixed interest rates, with an interest coverage ratio of 3.1 times.

Commenting on the development, Joshua Liaw, the manager’s chief executive officer, expressed gratitude towards the banking partners for their trust.

Liaw highlighted the significance of securing the commitment for refinancing, emphasising the “strong fundamentals and resilience of our unique portfolio of properties in providing social infrastructure assets in the UK, as well as the strength of our banking relationships.”

Liaw further outlined the focus on reinforcing the capital structure and maximising unitholder returns through asset repositioning strategies.

“We are focused on further reinforcing our capital structure and maximising unitholder returns through our asset repositioning strategies.

This entails divestments and repurposing vacant assets to unlock latent value in Elite REIT’s real estate portfolio. Early negotiations on tenant retention and lease expiry diversification are also in progress,” he added. /TISG

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