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Atrium enlarges and extends three-bank revolver and completes exit in Hungary and Romania

By James Wallace - Tuesday, May 15, 2018 9:43

Atrium European Real Estate, which owns and manages a 40-strong shopping centres portfolio across Poland, Czech Republic, Russia and Slovakia, has further increased its unsecured revolving credit facility (RCF) by €75m to €300m and extended the maturity by three years to 2023.

The listed Eastern Europe shopping centre manager’s financial update is dovetailed by the continuation of its portfolio re-positioning strategy which has seen Atrium sell 21 assets in the last 6 months for €175m including exiting the Hungary and Romanian markets.

The enlarged and extended revolver – provided by a syndicate of ING Bank,

Citibank and HSBC – has been refinanced on has on “favourable conditions” although the new pricing is undisclosed. The new €300m revolver is currently fully unutilised, providing Atrium with considerable headroom for capex or future acquisitions.

Ryan Lee, Group CFO said: “With this refinanced revolving credit facility we have taken advantage of the continued current favourable credit market conditions to improve the company’s financial flexibility and to support future growth.”

In November 2017, Atrium refinanced an existing €108m bank loan, which

had three years to run and put in its place a new 10-year loan of €136m with Berlin-Hannoversche Hypothekenbank. Atrium said this allowed the company to lock in an all-in cost of 1.9% compared to 4.1% under the previous loan which resulted in an annual cost saving of €1.7m. Prior to this, in September 2017, the Atrium secured a previous €50m increase to its revolver to €225m.

In addition, Atrium has a seperate €25m unsecured RCF with Deutsche Bank’s Luxembourg branch, currently unutilised and available until October 2019.

Atrium reported EPRA like-for-like net first quarter rental income growth of 4.1% across the entire portfolio and 2.5% growth excluding Russia, the company announced today in a trading update.  Total NRI dropped by €0.8m, due to €1.5m loss of revenue from disposals and €0.8m impact of redevelopments. EBITDA increased by 4% driven by the like-for-like net rental growth and the lower costs delivered through the 2017 cost savings programme.

The ongoing company strategy of Atrium is to focus reposition the portfolio. This has continued with the signing of two sales agreements in April; one for the sale of Atrium Militari in Romania at €95m and the other for the sale of Atrium Saratov in Slovakia at €10.3m. This followed the recent disposals of 18 assets in Hungary and one in the Czech Republic. In total, 21 assets were disposed of over the last 6 months, for €175m.

Liad Barzilai, chief executive officer of the Group, said: “Over the first quarter of 2018, we have continued to progress with our portfolio repositioning strategy. With the disposals announced earlier this year and our recent sale of Militari, we have now effectively exited Hungary and Romania and have over 80% of our assets in the Czech Republic and Poland, the region’s strongest economies.

“These strategies are being reflected in the group’s operational performance with healthy like-for-like rental income growth across the portfolio and I believe that there is more to come as our extensions complete and we receive the full benefit of our cost savings programme.”

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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