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Elite Commercial REIT obtains refinancing for up to GBP135 mil of loans

Jovi Ho
Jovi Ho • 2 min read
Elite Commercial REIT obtains refinancing for up to GBP135 mil of loans
Following a GBP28 million preferential offering that concluded on Jan 18, gearing fell to 40.9%. Photo: Elite Commercial REIT
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The manager of Elite Commercial REIT has obtained refinancing of up to GBP135 million ($229.66 million) from a group of financial institutions. 

While the manager did not disclose the lenders in a March 4 bourse filing, it says the “new lending relationships” were sourced through the REIT’s sponsors.

Funds will be used to refinance the REIT’s existing loan facilities. Structured as a three-year term and revolving credit facilities, the manager says this will allow it to “efficiently manage its working capital”.

The REIT’s gearing stood at 47.5% at Dec 31, 2023. Following a GBP28 million preferential offering that concluded on Jan 18, gearing fell to 40.9% with a GBP55.9 million debt headroom based on a 50% limit.

As at Dec 31, 2023, about 66% of borrowings are hedged on fixed interest rates and interest coverage ratio was 3.1 times.

Joshua Liaw, chief executive officer of the REIT manager, says: “We are grateful for our banking partners’ trust in us. Securing the commitment for this refinancing illustrates 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.”

See also: Elite Commercial REIT reports FY2023 DPU of 3.42 British pence, 28.9% lower y-o-y

Liaw adds: “With the achievement of this significant milestone in Elite REIT’s refinancing exercise, 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 Commercial REIT’s real estate portfolio. Early negotiations on tenant retention and lease expiry diversification are also in progress.”

Units in Elite Commercial REIT closed flat at 25 pence on March 1.

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