LGIM Real Assets, on behalf of its Build to Rent Fund, has arranged a £265m club facility supported by a banking group consisting of Lloyds, Natwest and ING. Lloyds acted as Documentation Coordinator & Agent and Lloyds, Natwest and ING as Mandated Lead Arrangers.
14 Jul 2021
The debt facility will be allocated against eight of the Fund’s operational assets and is provided by way of £150m term facility and £115m revolving credit facility. The facility will principally be used to refinance £220m of existing development facilities, representing a significant milestone for the BTR Fund as it matures into an investment fund – as opposed to a majority development asset portfolio.
LGIM Real Assets’ BTR Fund has over 5,000 homes across 15 schemes in the UK, bolstering Legal & General’s continued commitment to the regions, the levelling up agenda, and the growing strength of regional hubs across the UK. The financing will be allocated to eight of the Fund’s operational assets in Salford, Manchester, Bath, Walthamstow, Bristol, Leeds, and Birmingham.
In the last few years, the BTR sector has come into its own. It has cemented its position in the UK as an asset class and is successfully evolving away from the private rented sector. Since its inception in 2016, the BTR Fund has grown exponentially. Despite the challenges faced as a result of the coronavirus pandemic, in this year alone, the Fund has welcomed its first residents to its flagship Mustard Wharf schemes in Leeds, Box Makers Yard in Bristol and completed the final phase of The Slate Yard in Salford, plus committed over £150m in investments to Birmingham and Leeds respectively. With a rapidly growing portfolio of over £2bn and a pipeline to deliver a further 7,500 homes by 2025, LGIM Real Assets remains a leader within the sector.
Dan Batterton, Senior Fund Manager, LGIM Real Assets: "As we prepare for economic recovery, greater investment in the UK’s regional cities - particularly to deliver vital new housing - is needed. The BTR Fund continues to invest across the UK, playing an important role in Legal & General’s wider urban regeneration agenda. LGIM Real Asset’s BTR Fund has seen successive momentum over the past year, now with a portfolio of over £2bn we’re keen to continue with this precedent.
This fund facility represents a major step forward for the BTR Fund, and signals a real turning point, as it evolves from a development-centric to an investment-centric portfolio. The BTR sector has continued to present itself as solid investment proposition; with the fundamental backdrop of continued pressure on UK housing, this isn’t set to dwindle. This makes exposure to the residential sector a timely addition for investors."
Klaus Betz-Vais, Managing Director at Lloyds speaking on behalf of the lending group: "As long-term supporters of the UK’s housing market, we’re proud of the role we’ve played in helping L&G step up its own plans to provide high-quality housing across every corner of the UK, and to support the BTR Fund as it moves into its next phase with this investment facility. This fund will form a part of the effort to tackle the housing crisis that will be crucial to address if we’re to bounce back from the pandemic sustainably and with levelling-up front of mind."
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023
Legal & General Investment Management
LGIM is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.16 trillion1 ($1.47tn, €1.35tn, CHF 1.31tn). We work with a wide range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
For more than 50 years, we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across the full spectrum of asset classes including fixed income, equities, commercial property, and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.
1 Data as at 30 June 2023. Data combines assets under management by LGIM in the UK, LGIMA in the US and LGIM Asia in Hong Kong.
Assets under management include securities and derivatives positions
*as at HY 2023