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Treveria sheds Dawnay, Day link and braces for further market deterioration

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Treveria, a real estate investment company focused on German retail property, has announced the termination of its management agreements with the Dawnay, Day Group and the appointment of C

Treveria, a real estate investment company focused on German retail property, has announced the termination of its management agreements with the Dawnay, Day Group and the appointment of Cushman & Wakefield as property manager in place of Dawnay, Day Property Investment.

Following consultation with its major shareholders, the board has decided not to raise additional equity in a deal that would also have entailed an external asset manager but instead to focus on prudent cash and debt management for Treveria and its subsidiaries. The group’s EUR2.2 billion portfolio currently generates around EUR155m in annual gross rental income.

Treveria Asset Management has been appointed the new internal asset manager to replace Dawnay, Day Treveria Real Estate Asset Management. The new entity employs many of the asset management staff made redundant as part of the restructuring of the Dawnay, Day group.

‘The new arrangements are structured to provide the best opportunity to rebuild shareholder value over the medium term,’ says Treveria chairman Ian Henderson. ‘Management links with the Dawnay, Day Group are now severed and continuity in the key personnel has been ensured.

‘We look forward to continuing to work with our existing team led by director of finance Damian Wisniewski and director of property Chris Kingham, with David Hunter as the non-executive chairman of Treveria Asset Management, and to starting what I am sure will be a successful working relationship with Cushman & Wakefield.

‘Since the board announced a strategic review in June we have considered a number of options and opportunities. The conclusion we have reached is that the most appropriate course is to focus on the management of our existing portfolio by internalising the asset management team and managing our balance sheet prudently, whilst ensuring we utilise our cash resources carefully.

‘We remain confident that the portfolio offers the potential to deliver long-term value. We have good quality well-located assets, which produce recurring income and provide significant asset management opportunities. We are glad that the unsettling period caused by the financial difficulties at Dawnay Day is behind us and look forward to focusing on extracting value from our assets over the medium term.’

In September the Treveria board announced it was considering a possible injection of new equity into the business with a preferred third party, which would have been linked to the award of an external management contract. The board has now concluded that given the current share price, a capital injection at this point in time would not be in the interests of shareholders.

Treveria acknowledges that most of the group’s debt facilities are close to the upper limit of their respective loan to value covenants and the board says it expects to engage in a constructive dialogue with its creditors to find workable solutions in the event that market conditions deteriorate further, a strategy for which major shareholders have indicated support.

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