Shaftesbury, has announced a new 10-year loan agreement with Aviva Investors for £200 million. This strategic move emphasizes the value and attractiveness of Shaftesbury Capital’s real estate assets, particularly within the Carnaby estate in London.

Formed in March through an all-share merger of Shaftesbury PLC and Capital & Counties Properties PLC, Shaftesbury Capital invests in prime locations including Covent Garden, Carnaby, Soho, Chinatown, and Fitzrovia. The new loan will be secured against a portfolio of assets within the Carnaby estate, highlighting the intrinsic value of these properties.

This £200 million loan will sit alongside existing secured term loans with Aviva Investors of £130 million and £120 million, maturing in 2030 and 2035 respectively. The annual cash interest rate for the aggregate £450 million of secured term loans with Aviva Investors will be 47%, according to Shaftesbury Capital.

The proceeds from the new facility will be used to partly repay Shaftesbury Capital’s £576 million unsecured loan, drawn in April 2023 to fund the repayment of Shaftesbury PLC secured bonds. As a result, the weighted average maturity of drawn debt will be extended to five years, with the weighted average cost of debt being 4.2%, reducing to an effective cash cost of 3.3% when considering interest income on cash deposits and the benefit of interest rate hedging.

The financing demonstrates a continuation of the strong relationship between Shaftesbury Capital and Aviva Investors, underlining the attractiveness of the company’s property portfolio to a broad range of institutional capital. Aviva Investors Head of Real Estate Debt, Gregor Bamert, expressed strong conviction in the Carnaby estate and Shaftesbury Capital, citing them as compelling examples of well-curated and thriving locations.

Shaftesbury Capital’s recent financial performance further underscores the value of its real estate assets. The company reported a swing to interim profit for the first half of 2023, with a pretax profit of £799.1 million, up from a loss of £5.9 million a year earlier. Revenue doubled to £82.4 million, with net rental income soaring to £58.3 million from £26.9 million. The vacancy rate was 5.9% as of June 30, and 220 leasing transactions were completed in the first half.

The new loan agreement with Aviva Investors not only enhances Shaftesbury Capital’s debt maturity profile but also reflects the robustness and potential of its real estate assets. The focus on securing assets within the Carnaby estate, a prime London location, illustrates the strategic importance of real estate value in shaping the company’s financial decisions and growth trajectory.