LGIM's UK and European Real Estate Debt division provided a £150 mln (€176 mln) senior loan to Unite, the UK's largest student accommodation provider.
This loan is secured by 10 PBSA properties located in major UK cities. The funds will be used to refinance an existing bank loan for Unite's flagship Unite UK Student Accommodation Fund (USAF), which matured in Q1 2024.
This funding follows LGIM's £400 mln (€469 mln) senior loan in July 2023 used to refinance a public bond for USAF.
James Spencer-Jones, head of Real Estate Debt Europe, LGIM said: ‘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 added: ‘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.’
LGIM believes that a lack of speculative development in student housing will likely lead to rent increases for existing properties. It anticipates a long-term rise in student numbers, driven by both international enrollment and a larger domestic youth population.
Unite were advised by Eversheds, while Simmons & Simmons acted for LGIM.
