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Portfolio Refinance

Case Study: Portfolio Refinance

Value Enhancement

Refinance agreements reached on two retail portfolios.

On Acquisition

Two portfolio of retail assets reached loan maturity during the height of Covid-19 restrictions. Rent and service charge payments had been affected, within the shopping centre, retailers had ceased trading leading to a loss of rent and the landlord becoming liable for service charge, insurance and rates on those now vacant units.

Actions Undertaken

In working with our clients financial consultant, significant reports were prepared showcasing the fundamental strengths of both asset portfolios; both were dominant in their catchment areas, both had positive collection rates pre Covid-19. Detailed business plans, cashflows, capex schedules, valuer packs were prepared. The Sigma team met with banks, mezzanine lender providers and valuers to discuss the resilience of these portfolios.

The resilience of both assets was further demonstrated by the Covid-19 regears which were being undertaken – in each case retailers traded break options / pushed back lease expiry dates in exchange for rent concessions. This demonstrated that the retailers were committed to remaining in each asset longer than they legally were obliged to.

Both portfolios secured the necessary refinance with the introduction of new mezzanine partners.

Performance Stats

Despite the challenges posed by Covid 19 restrictions, the subsequent closures enforced on retailers and consequential withholding of rent & Service charge by tenants, funding was maintained for these assets.