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LGIM furthers Unite relationship with £150m funding
Legal & General Investment Management’s dedicated UK and European Real Estate Debt division has completed a £150m senior loan with Unite, secured against 10 Purpose Built Student Accommodation assets across key UK cities.
12 Apr 2024
Legal & General Investment Management’s (LGIM’s) dedicated UK and European Real Estate Debt division has completed a £150m senior loan with Unite, secured against 10 Purpose Built Student Accommodation (PBSA) assets across key UK cities.
The loan will be used to refinance an existing bank facility for its flagship Unite UK Student Accommodation Fund (USAF), which matured in Q1 2024. The funding builds on the strong relationship between Unite Group and LGIM, and follows on from LGIM’s £400m senior loan in July 2023 which was used to refinance a public bond for USAF.
The Unite Group is the largest UK purpose-built student accommodation (PBSA) operator and USAF is the UK’s largest specialist student accommodation fund with 28,000 beds under management. Established in 2006, USAF sits within the MSCI UK Specialist Fund Index. The Unite Group is the largest shareholder of USAF and acts as asset and fund manager, and all USAF assets benefit from Unite branding.
LGIM believes that the student accommodation sector will benefit from a relative lack of new speculative development, which should support rental growth while supply issues in conventional buy to let residential - which would normally offer an option for students - will drive demand towards fit for purpose accommodation. It sees fundamental support from an increase in international student numbers over the long term, together with growth in younger age cohorts domestically. Selectivity based on the strength of the university will remain vital as we see increasing differentiation in higher education as a long-term trend.
Unite were advised by Eversheds and Simmons & Simmons acted for LGIM.
Investing globally, LGIM Private Credit manages around £18.6bn1 of investments on behalf of institutional clients globally. Its investment capabilities extend across real estate debt, infrastructure debt, corporate debt and alternative debt.
James Spencer-Jones, Head of Real Estate Debt Europe, LGIM: “We are delighted to continue building on our long-standing relationship with Unite Group. We see continued resilience within the PBSA sector, driven by strong investment and occupational fundamentals. This funding delivers both flexibility for USAF whilst retaining strong structural capabilities and investment characteristics for our investors. The financing continues our pivot into high conviction subsectors and further growth of LGIM Real Estate Debt’s loan book.”
Gary Leadbeater, Director of Group Treasury and FP&A, Unite Group: “This transaction is a further endorsement of the leadership credentials of both parties within the sector, further demonstrating the strength of our relationship with LGIM.”
References
1Data as at 31 December 2023.
Further information
Mat Barling
Communications Manager
Asset Management
T: +44 (0) 7860 608361
Notes to editors
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY23) of which c40% (circa £0.5 trillion) is international.
We have a highly synergistic business model, which continues to drive strong returns. We are a leading international player in Institutional Retirement, in Retail Savings and Protection, and in both public and private markets through our Asset Management division. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
As at 7 June 2024, we estimate the Group’s Solvency II coverage ratio to be 224%.
As at 11 June 2024, Legal & General has a market capitalisation of £14.6 billion.
LGIM is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.2 trillion1 ($1.5tn, €1.3tn, CHF 1.2tn). 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.
1Data as at 31 December 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.