UK: LGIM’s dedicated UK and European Real Estate Debt division has completed a £400 million 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 UK PBSA assets 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 LGIM believes is likely to outperform in the medium term due to favourable demand and supply dynamics.
The Unite Group is the largest UK PBSA operator, while USAF is the UK’s largest specialist student accommodation fund with 28,000 beds under management. The Unite Group is the largest shareholder of USAF and acts as asset and fund manager, and all USAF assets benefit from Unite branding.
Libby Thelwall, senior investment associate at LGIM, said: “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, added: “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.”
Rothschilds acted as debt advisor to Unite and Simmons & Simmons acted for LGIM Real Estate Debt.
The deal comes shortly after Unite raised £300 million for new developments in London and Bristol.
