Starwood European Real Estate Finance (SWEF) was established in November 2012 as a closed-end investment company. The business plan is simple: it has used the £229m raised at the time to issue mortgages backed by commercial property in the UK and continental Europe, as well as mezzanine finance.
With banks still cautious about lending to commercial landlords, demand for mortgage loans from alternative lenders is buoyant. That has given Starwood the luxury of being able to pick high-return investments carrying relatively little risk. Lending a maximum of 75 per cent of the asset value of any property provides a further safeguard against any surprise downturn.
At first the company struggled to spend the funds it raised, so that the projected 3.5p a share dividend proposed in the first year on the basis of all the capital being put to work had to be trimmed back to 1.9p a share. While investment activity picked up towards the end of 2013, the group was still only two-thirds invested through seven ventures at the yead-end - although the remaining funds are expected to be fully invested through two or three additional transactions in the second quarter. This is important because, once fully invested, the company plans to pay 7p per share in dividends every year.
| STARWOOD EUROPEAN REAL ESTATE FINANCE (SWEF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 101p | MARKET VALUE: | £ 240m | |
| TOUCH: | 100-101p | 12-MONTH HIGH: | 107p | LOW:98p |
| DIVIDEND YIELD: | 1.9% | PREMIUM TO NAV: | 2% | |
| LOANS ADVANCED: | £156.4m | NET CASH: | £79.7m | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 98.0 | na | na | na |
| 2013 | 99.1 | 4.1 | 1.7 | 1.9** |
| % change | +1 | - | - | - |
Ex-div: - Payment: - *Since incorporation on 9 November 2012 **Final dividend of 1.1p paid in February | ||||
