UK: LGIM Real Assets (Legal & General Investment Management), has arranged a four year, £270 million green development financing on behalf of its BTR platform.
The finance was arranged with a group of banks consisting of HSBC, NatWest and Standard Chartered. HSBC and Standard Chartered acted as joint sustainability coordinators while NatWest acted as documentation coordinator and agent.
The debt facility will be used to fund the development of a £500 million BTR scheme in Wandsworth, south London.. The funding is aligned to the Loan Market Association’s Green Loan Principles and is one of the largest sustainable finance facilities in the housing sector to date. Eligibility under these principles specify that loan proceeds are to be used to finance green buildings which meet regional, national or internationally recognised standards or certifications for sustainability.
The former B&Q and Homebase sites are one of Legal & General’s five BTR schemes in London and mark LGIM’s largest residential development to date.
The scheme, on the former site of B&Q and Homebase retail outlets, will deliver more than 1,000 homes, 35 per cent of which will be affordable, and more than 60,000 square feet of commercial space. Construction work is already underway with the first homes ready for occupation in 2023. It is LGIM’s largest residential development to date
In 2021, LGIM Real Assets was the UK’s largest BTR investor committing £700 million to the sector, across more than 2,000 new apartments in six developments. Last year’s acquisitions included sites in Birmingham, Glasgow, Hove, Southampton, Lewisham, and Stratford. In total, LGIM Real Assets has committed £2.5 billion to the BTR sector to date, with 20 sites in 12 cities. More than 2,500 apartments are already occupied, with over 6,000 more under construction.
LGIM Real Assets also secured a mandate with Legal & General’s retirement business (LGRI) for a further £2.5 billion investment into BTR in February 2022, delivering another 7,000 new homes over the next five years.
Dan Batterton, head of residential for LGIM Real Assets, said: “The debt facility demonstrates the BTR sector’s solid investment proposition where the existing imbalance between demand and supply continues to support growth. We’re redoubling our commitment to BTR following an exceptional year as the largest BTR investor with the largest number of new leases across the market. The apartments will be designed with a focus on lifestyle and resident satisfaction, delivering higher standards of design, service, and asset management, operational efficiency, and long-term environmental sustainability with operational net zero carbon targeted by 2030. In keeping with our Inclusive Capitalism purpose, we want to help tackle the UK’s housing crisis, create new neighbourhoods and bring brownfield sites back into effective use. This will also support local authorities in meeting their housing targets.”
Phil Hooper, head of real estate at NatWest, speaking on behalf of the lending group, said: “We are delighted to support LGIM in the delivery of over 1,000 new build-to-rent homes. The sustainable nature of the assets is testament to LGIM’s transition to a zero carbon economy and we are therefore pleased to complete the financing as a green loan.”
