The loan represents a cross-border financing arrangement and breaks down into two tranches of five and ten years, respectively. It is collateralised with 40 supermarkets from the existing portfolio of Trei Poland, the supermarkets being occupied by Biedronka, Poland’s market leader in food retailing. Trei intends to use the borrowed capital to finance its growth trajectory.
Matthias Schultz, CFO of Trei Real Estate, elaborated: “The loan represents a classic real estate financing arrangement, secured by land charges and rental income. The 40 properties were previously debt-free – either because they were newly constructed in the time since the last round of financing or because prior loans were entirely repaid.”
In the long run, Trei plans to increase its debt-to-equity ratio noticeably. Schultz commented: “The financing arrangement will raise the gearing ratio of Trei Real Estate to around 39 percent. This implies an increase by nearly ten percentage points over the past year. By the end of 2020, our gearing ratio is supposed to be somewhere between 40 and 45 percent. Our medium-term target is a 50-percent ratio relative to our overall portfolio.”
Pepijn Morshuis, CEO of Trei Real Estate, explained the future strategy of Trei: “The purpose of this financing arrangement is to free up capital that we may then use to fund our development activities in Poland and Germany. We will use some of the funds to develop additional Vendo Parks in Poland, while the rest will be repatriated to Germany toward the development of residential projects. In addition to our existing portfolio, we currently have c. 960 million euros worth of property developments in the pipeline.”
Overall, Trei operates around 100 supermarket properties in Poland that are rented out to Biedronka, while also operating 17 Vendo Parks. Biedronka is Poland’s market leader in food retailing, operating more than 3,000 grocery stores.
