Starwood European Real Estate Finance Ltd (SWEF) has completed the majority of its portfolio wind-down, returning GBP376 million to shareholders since January 2023 — representing 91% of its net asset value (NAV) as of that date. As of 31 December 2025, the company has only one loan investment remaining in its portfolio, signaling the end of its orderly realisation strategy.

Portfolio Wind-Down Nears Completion

According to the latest quarterly update from SWEF, the company repaid GBP56 million in loans during the fourth quarter of 2025, leaving only one loan investment — valued at 100% of the funded portfolio — remaining. This final loan is classified as Stage 1, the lowest risk profile, according to the company’s risk assessment framework.

The company returned GBP55 million to shareholders in the fourth quarter of 2025, bringing the total capital returned to GBP376 million. This figure represents 91% of the NAV as of 31 January 2023, which was GBP413.2 million. As of 31 December 2025, SWEF’s share price was 87.0 pence, while its NAV stood at 96.82 pence, resulting in a 10.1% to NAV.

Liquidity and Shareholder Returns

SWEF reported holding GBP14 million in cash as of 31 December 2025, following the GBP55 million return to shareholders. The company has no unfunded loan commitments at this time, ensuring sufficient liquidity for ongoing operations.

John Whittle, Chairman of SWEF, said in a statement: ‘We are extremely pleased to have made such strong progress in the final quarter of 2025. There now remains just one loan realisation outstanding, which is classified at the lowest risk profile, Stage 1. Having returned GBP55 million in the last quarter, the Company has now returned 91% of the January 2023 NAV or GBP376 million.’

The company announced a dividend of 1.375 pence per share for the fourth quarter of 2025, to be paid in February 2026. However, the Directors have not set a target dividend for 2026, as the orderly realisation of its loan assets is nearing completion.

Portfolio Metrics and Risk Profile

As of 31 December 2025, the weighted average remaining contractual loan term of the funded portfolio was 0.1 years, indicating that the final loan is nearing maturity. The weighted average Loan to Value (LTV) for the portfolio is 47%, reflecting a conservative lending approach.

All investments are in floating rate loans, with 100% of the funded portfolio in the office sector, located in Spain, and denominated in euros. The company has hedged all non-sterling exposure back to sterling, ensuring currency risk is mitigated.

The company’s current net asset value is GBP22.5 million, with GBP8.3 million in loans advanced, including accrued interest and exit fees. The Group holds GBP14.4 million in cash and has GBP0.2 million in other net liabilities, including hedges.

According to the factsheet, the unlevered annualised total return for the portfolio is 11.2%, calculated on amounts outstanding at the reporting date. This figure assumes all drawn loans remain outstanding for the full contractual term and includes an assumed profile for future interbank rates, though actual rates may vary.

SWEF has returned capital to shareholders in an orderly manner since the Board announced its proposed orderly realisation and return of capital in October 2022. The proposals were approved by shareholders at an Extraordinary General Meeting (EGM) in January 2023, and the company has continued to return cash as soon as reasonably practicable following loan repayments.

As of the date of the factsheet, the company had 23,204,738 shares in issue, with 23,204,738 total voting rights. The company is confident it holds sufficient cash to meet ongoing operational commitments.

The unaudited 31 December 2025 financial statements show negative income reserves, but the company can continue to pay dividends as long as it passes the solvency test — i.e., it is able to pay its debts as they come due.

The Group continues to monitor and manage the credit quality of its loan exposures and repayments. As of 31 December 2025, the Group’s exposure is limited to one loan investment, which remains under close scrutiny.