TIDMSWEF
Starwood European Real Estate Finan
26 March 2021
Starwood European Real Estate Finance (SWEF)
26/03/2021
Results analysis from Kepler Trust Intelligence
-- Starwood European Real Estate Finance (SWEF) has reported an
NAV total return of 6.3% for the year ending 31/12/20 and a share
price total return of -7.5%. Excluding dividends paid, the NAV per
share rose 0.9% to 104.18p.
-- Last year's (2020) targeted dividend of 6.5p per share was
paid, covered 90% by income earned. As announced in July 2020 as a
result of the falling interest rate environment and its effect on
the yields achieved on loans, the target for 2021 is 5.5p per
share, paid quarterly. The premium over base rates remains high
relative to recent history at these levels.
-- No impairments were taken to the loan book, despite the
impact of the pandemic. However, six loans, 35.3% of the portfolio,
were classified as stage 2 last June, meaning credit risks were
deemed to have increased significantly. These are predominantly in
the retail and hospitality sectors.
-- All loans have paid all scheduled interest and principal in full and on time.
Kepler View
The robust results from Starwood European Real Estate Finance
(SWEF) after such a tumultuous year underline the potential
benefits from investing in real estate via debt rather than equity.
The majority of SWEF's loan book is in areas which have performed
strongly from an income and valuation perspective.
However, SWEF does have significant exposure to hospitality
(35.7%) and retail (12.9%), two sectors of the real estate market
which have been forced out of trading for much of the past 12
months.
Yet while the equity in these sectors has seen some declines,
SWEF's investment manager, advised by Duncan MacPherson and Lorcain
Egan as the investment adviser, has not seen fit to recognise any
losses on the loans it has made in these sectors, estimating that
while default risks may have increased, as shown by the six loans
classified as stage two, there is no current expectation of losses
on those loans.
Considering the near-term risks, we continue to believe that a
double digit discount to NAV is attractive (it is 18.3% as of
25/03/21) particularly when the forward yield of 6.4% is compared
to the average 4.4% yield available on the AIC UK Commercial
Property sector.
In the analysis which follows we examine these results in more
detail and explain their implications for shareholders and
prospective shareholders in SWEF...
CLICK HERE TO READ THE FULL REPORT
Visit http://www.trustintelligence.co.uk/investor for more high
quality independent investment trust research.
Important information
This report has been issued by Kepler Partners LLP. The analyst
who has prepared this report is aware that Kepler Partners LLP has
a relationship with the company covered in this report and/or a
conflict of interest which may impair the objectivity of the
research.
Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise and you may get
back less than you invested when you decide to sell your
investments. It is strongly recommended that if you are a private
investor independent financial advice should be taken before making
any investment or financial decision.
Kepler Partners is not authorised to make recommendations to
retail clients. This report has been issued by Kepler Partners LLP,
is based on factual information only, is solely for information
purposes only and any views contained in it must not be construed
as investment or tax advice or a recommendation to buy, sell or
take any action in relation to any investment.
The information provided on this website is not intended for
distribution to, or use by, any person or entity in any
jurisdiction or country where such distribution or use would be
contrary to law or regulation or which would subject Kepler
Partners LLP to any registration requirement within such
jurisdiction or country. In particular, this website is exclusively
for non-US Persons. Persons who access this information are
required to inform themselves and to comply with any such
restrictions.
The information contained in this website is not intended to
constitute, and should not be construed as, investment advice. No
representation or warranty, express or implied, is given by any
person as to the accuracy or completeness of the information and no
responsibility or liability is accepted for the accuracy or
sufficiency of any of the information, for any errors, omissions or
misstatements, negligent or otherwise. Any views and opinions,
whilst given in good faith, are subject to change without
notice.
This is not an official confirmation of terms and is not a
recommendation, offer or solicitation to buy or sell or take any
action in relation to any investment mentioned herein. Any prices
or quotations contained herein are indicative only.
Kepler Partners LLP (including its partners, employees and
representatives) or a connected person may have positions in or
options on the securities detailed in this report, and may buy,
sell or offer to purchase or sell such securities from time to
time, but will at all times be subject to restrictions imposed by
the firm's internal rules. A copy of the firm's Conflict of
Interest policy is available on request.
PLEASE SEE ALSO OUR TERMS AND CONDITIONS
Kepler Partners LLP is authorised and regulated by the Financial
Conduct Authority (FRN 480590), registered in England and Wales at
9/10 Savile Row, London W1S 3PF with registered number
OC334771.
This information is provided by Reach, the non-regulatory press
release distribution service of RNS, part of the London Stock
Exchange. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
Reach is a non-regulatory news service. By using this service an
issuer is confirming that the information contained within this
announcement is of a non-regulatory nature. Reach announcements are
identified with an orange label and the word "Reach" in the source
column of the News Explorer pages of London Stock Exchange's
website so that they are distinguished from the RNS UK regulatory
service. Other vendors subscribing for Reach press releases may use
a different method to distinguish Reach announcements from UK
regulatory news.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NRAKQLBLFXLFBBV
(END) Dow Jones Newswires
March 26, 2021 05:21 ET (09:21 GMT)
Starwood European Real E... (LSE:SWEF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Starwood European Real E... (LSE:SWEF)
Historical Stock Chart
From Apr 2023 to Apr 2024