Starwood European Real Estate Finance Ltd said on Friday that it had experienced a positive quarterly performance with consistent dividends and strong cash generation.
The Guernsey-headquartered investment company, which manages and realises high quality senior and mezzanine real estate debt in the UK and Europe, reported an annualised dividend yield of 6.1% on the share price as of March 31.
Starwood declared a dividend for the first quarter of 1.375 pence per ordinary share, to be paid next month. This equates to an annualised income of 5.5p per annum. The group has paid £206 million in dividends since its inception, and said its share price on March 31 was 89.9p with a net asset value of 103.82p.
Starwood said that 77% of its portfolio was contracted at floating interest rates with floors. The loan book was performing in line with expectations with its defensive qualities reflected in Starwood’s continued NAV stability.
During the last quarter, Starwood said that £35.9 million, almost 8.5% of its total funded loan portfolio for December, had been repaid across seven investments. This included the full repayment of a £23.0 million loan on an Oxford hotel. Starwood’s portfolio has an average remaining loan term of 1.5 years.
Starwood said that proceeds were used in the quarter to repay outstanding bank debt, leaving cash balances at £22.6 million as of March 31. Of this, Starwood said £13.4 million would be used to pay the additional dividend declared in March and the quarterly dividend declared this month.
John Whittle, Starwood’s chair, commented: ‘We remain pleased with the continued strong ongoing robust performance of the Group‘s portfolio with loans performing robustly leading to an enduringly strong valuation of the underlying collateral and all interest and scheduled amortisations being received as expected.
‘As a result of this strong performance over the year ended December 2022, partly as a result of the high floating rate element of the portfolio (currently 77%), the Group was not only able to meet its dividend target of 5.5p per share but also declared a special dividend of 2.0p per share in March leading to a total dividend distribution of 7.5 pence per share for 2022. In our view, this is a highly attractive income proposition.’
Shares in Starwood were up 1.0% at 90.00p on Friday morning in London.
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