KCR Residential REIT secures new £7.85m Al Rayan Bank facility

LONDON - KCR Residential REIT plc, a residential real estate investment trust, has announced the completion of its debt refinancing efforts. The company has entered into a new five-year, £7.85 million facility with Al Rayan Bank Plc, effective from Thursday. The Sharia law-compliant facility carries a fixed equivalent interest rate of 6.10% per annum and is secured against all assets of the subsidiaries KCR (Kite) Limited and K&C (Coleherne) Limited, including properties on Ladbroke Grove and Coleherne Road.

This strategic financial move follows the expiration of the company’s previous fixed-rate facilities with Hodge Bank earlier this year. The legacy facilities featured a 3.50% fixed interest rate, significantly lower than the current market rates. The new facility is expected to incur approximately £200,000 more per annum in funding costs compared to the prior arrangement, but it remains materially lower than the variable rate that would have ensued post the fixed-rate period.

The additional capital from the refinancing will support the Group’s ongoing activities, despite the fact that the increased financial costs will contribute to continued cash constraints for the business, making the achievement of a cash-neutral position more challenging.

KCR Residential REIT is focusing on improving the operational performance of its existing assets and controlling costs amidst ongoing market pressures. The details of the refinancing were made public in accordance with the Market Abuse Regulation (E.U.) No. 596/2014, which is part of U.K. law under the European Union (Withdrawal) Act 2018.

This financial restructuring is part of KCR’s broader strategy to manage its capital and assets effectively in a challenging economic environment. The information provided in this article is based on a press release statement from KCR Residential REIT plc.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.