LGIM’s dedicated UK and European Real Estate Debt division has completed a £400m loan for Unite to refinance a public bond for its flagship Unite UK Student Accommodation Fund (USAF), which matured in 2023
28 Jul 2023
LGIM’s dedicated UK and European Real Estate Debt division has completed a £400m loan for Unite to refinance a public bond for its flagship Unite UK Student Accommodation Fund (USAF), which matured in 2023.
The loan is secured against a portfolio of 23 purpose-built student accommodation assets across the UK, in key university towns and cities. The transaction extends LGIM’s relationship with the Unite Group, as well as further expanding the loan book exposure to student accommodation, a sector that they believe is likely to outperform in the medium term due to favourable demand and supply dynamics.
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 is one of the top performing funds in 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.
Rothschilds acted as debt advisor to Unite and Simmons & Simmons acted for LGIM Real Estate Debt.
Investing across the UK, US and Europe, LGIM Real Assets manages around £16.5 billion (as at 31 December 2022) of private credit investments on behalf of institutional clients globally. Its investment capabilities extend across real estate debt, infrastructure debt, corporate debt and alternative debt.
Libby Thelwall, Senior Investment Associate at LGIM:
“We are delighted to provide this financing to Unite, a top-quality operator in their space and an existing borrower of LGIM. This investment shows our ability to provide competitive capital to owners of high-quality real estate and we are proud to originate a facility of this size against a backdrop of higher interest rates, tightening credit standards and uncertainty. We worked hard with Unite to provide a flexible but conservatively structured facility that suits both parties.”
Gary Leadbeater, Group Treasury Director at the Unite Group: “It is fantastic to extend our relationship with LGIM, demonstrating our continuing leadership credentials in the sector. As the economy adjusts to a higher interest rate environment, this transaction further demonstrates our ability to access competitively priced capital in challenging market conditions.”
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