Mon, 02 Apr 2012 | COMMERCIAL PROPERTY
A building owned by Schroders' real estate investment trust (Reit) has been sold in a bid to help the group cut its debts.
The BT office, based in West Bromwich, was first acquired in October of last year for £14.8 million. Now, the Reit has sold the building for £19.5 million and used some of the proceeds to reduce its debts by around £10 million, the Financial Times Adviser reported.
The trust now has a total cash balance of £37.2 million and stated that it will make the debt repayment later this month, saving it in the region of £530,000 a year in loan interest payments, as well as serving to “enhance dividend cover and improve the company's refinancing prospects”.
Last month (March), Schroders acquired two additional commercial properties in Sweden for a sale price of €36 million.
The group made the strategic move due to the strong economic forecasts for the Nordic countries, which have the relatively low government debt and balanced finances of countries such as Sweden and Finland compared to other European countries that are still facing difficulties with growing budget deficits.
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