European asset manager LGIM, via its dedicated UK and European real estate debt division, has provided a £400 mln (€468 mln) loan to UK-based PBSA operator Unite.
Unite will use the resources 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 PBSA 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 is expected to outperform in the medium term because of favourable demand and supply dynamics.
Libby Thelwall, senior investment associate, LGIM Real Estate Debt 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 of 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.’
The Unite Group is the largest shareholder of USAF, which has 28,000 beds under management in the UK.
Rothschilds acted as debt advisor to Unite and Simmons & Simmons acted for LGIM Real Estate Debt.
