Invista European Real Estate Trust suffered a 24.6% fall to E2.34 in its net asset value in the year to 30 September.
The NAV fall came after a 9.5% decline in the value of the 51-property portfolio to E687m (£646m). The decline in the last three months – between June and September – was 5.7%.
After the year end the trust, which is managed by Invista Real Estate Investment Management, agreed with its lender, Bank of Scotland Corporate, a three-year extension of its senior debt facility. It has drawn down E410m (£386m), representing a loan-to-value ratio of 65%, until 31 December 2011 at a margin of 2.75% over three-month EURIBOR.
The debt is hedged until 2013, giving a fixed interest cost of 6.8%. Invista admitted the debt was ‘extremely expensive’ and it would be refinanced to a lower cost once financial markets improve. In the meantime it is selling properties to reduce debt.
‘The company will not be immune from the current market dislocation, however it is now on a firmer footing having removed the uncertainty over the refinancing and the completion of the recent sales,’ said chairman Tom Chandos.
‘The company will continue to work diligently through the agreed strategy of effecting asset disposals, reducing borrowings, preserving income and adding value to assets with the aim of returning long term value to shareholders.’