SWEF announces further impairment on Irish office loan portfolio

(Sharecast News) - Starwood European Real Estate Finance announced a further impairment on its Irish office loan portfolio on Friday, citing continued pressure in the Dublin office market and uncertainty over recovery prospects. The loan, which represented 7.8% of the company's net asset value as of 31 May, was written down by an additional €7.3m, reducing its carrying value to €6.75m.

That followed an earlier €12.9m impairment booked in October 2024, which had already halved the loan's value at the time.

The latest provision equated to a further 4.2p per share reduction in net asset value.

SWEF said its board had reviewed alternative business plans for the underlying asset and determined that a wide range of outcomes remained possible, with varying levels of potential recovery.

"The investment adviser will continue to actively manage the position to maximise the opportunity for value recovery and the board will continue to closely monitor the position and ongoing developments," Starwood said.

Its net asset value stood at £149.6m as of the end of May, with a net asset value per share of 101.09p.

Starwood said it was currently finalising its second-quarter portfolio update, expected shortly.

Since adopting an orderly wind-down strategy in January 2023, the company had returned £256m to shareholders via compulsory redemptions, equivalent to 61.9% of net asset value as of the strategy's adoption.

At 0950 BST, shares in Starwood European Real Estate Finance were down 1.14% at 87.24p.

Reporting by Josh White for Sharecast.com.