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HomeBusinessAtria Watford’s owner secures major financial deal

Atria Watford’s owner secures major financial deal

Atria Watford, along with three other major UK shopping and leisure centres owned by SGS Group, is part of a significant financial development.

SGS has successfully completed a recapitalisation which includes securing £445 million in new senior financing from Lloyds Bank.

This financial boost is divided into a £395 million senior term loan and a £50 million capex facility. The financing is a demonstration of Lloyds Bank’s confidence in SGS Group and the retail sector.

The term loan, set to mature initially in 2028 with an option for extension, is fully utilised to clear £444 million owed to previous creditors. The remaining £1.3 billion debt of SGS has been converted into equity or equivalents within the company’s structure.

SGS Group, which became independent from Intu Properties in 2020 following its administration, has appointed a new board as part of the recapitalisation effort.

The board includes former Unibail-Rodamco-Westfield CFO Jaap Tonckens as Non-Executive Chairman and other seasoned professionals in retail and investment.

The deal saw unanimous support from creditors, reflecting confidence in SGS’s operational achievements across its centers in recent years. Under the management of Global Mutual, occupancy rates at these centers reached 93% by December 2023, with foot traffic also showing significant improvements since 2021. SGS reported a 22% increase in static net rental income by the end of 2023.

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The centres, including Atria Watford, have enjoyed robust investment from major tenants like Marks & Spencer, H&M, and ZARA, who have collectively invested over £68 million in store enhancements since 2020.

Andrea Trozzi, outgoing SGS Executive Chairman, comments: “The completion of this landmark deal marks a major achievement for SGS and a vote of confidence by Lloyds Bank.

“This is the largest UK shopping centre refinancing in the past five years and means that the Group’s long term capital structure is now secured, backed by a supportive investor group and a solid financial and operational performance across all four assets.

“SGS is now well placed to continue delivering on its business plan, with further investment and value-driving asset management initiatives planned, as tenants focus their resources on regionally dominant destinations such as these – that deliver the best performance.”

Jaap Tonckens, incoming SGS Non-Executive Chairman, comments: “These leading retail and leisure assets have gone from strength to strength since separating from Intu four years ago due to the excellent work of Alix Partners, the outgoing Board members, Global Mutal and Savills.

“The overwhelming support for the recapitalisation reflects this very strong performance and investor confidence in prime shopping centres.

“I look forward to being a part of the next phase of the SGS journey and working with the new Board to build upon the achievements to date.”

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