Thursday 18 January 2018

Hammerson and Allianz arrange €625m, seven-year term loan on Dundrum

Dundrum (Stock picture)
Dundrum (Stock picture)
John Mulligan

John Mulligan

UK property giant Hammerson, and its joint venture partner Allianz, have arranged a €625m, seven-year term loan secured on the Dundrum Town Centre in south Dublin.

The facility is secured against Dundrum, which is valued at more than €1.5bn, at what Hammerson said was a 'conservative leverage below 40pc.'

Hammerson’s share of the loan is €312.5m.

Hammerson, a FTSE-100 member, acquired 50pc stakes in Dundrum and the Ilac Centre in Dublin city centre in 2015, after paying Nama €1.85bn for €2.6bn worth of loans connected to the developments. Those loans are also held over the Pavilions Shopping Centre in Swords, north of the city. The other 50pc of the Dundrum Town Centre is owned by Allianz.

Dundrum Town Centre is the largest asset in a portfolio which Hammerson and Allianz invested in during October 2015 as part of a long term investment strategy in Ireland.

The 123,800 sq m centre is 99pc occupied and generates total passing rent of circa €66m per annum.

BNP Paribas and DekaBank acted as lead arrangers and Allianz Real Estate acted on behalf of a number of Allianz companies in relation to the new €625m facility.

"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,” said Hammerson group treasurer Richard Sharp. “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."

The non-recourse facility is repayable in full at maturity in September 2024 and the interest cost is expected to be less than 2pc.

Hammerson’s share of net proceeds will be used to reduce drawings under its revolving credit facilities and group loan-to-value ratio will be unchanged. The majority of Hammerson’s financing continues to be on an unsecured basis.

Releasing half-year results in July, Hammerson said its group performance had been boosted by the performance of Dundrum.

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