UK-focused social infrastructure real estate investment manager, Newcore Capital has secured a £40 mln (€48 mln) debt facility from HSBC UK, comprising a £20 mln senior loan facility and a £20 mln revolving credit facility.
The facility also carries a £40 mln uncommitted accordion option, subject to the lender’s discretion, that will lift the total facility size up to £80 mln.
Newcore has maintained low leverage since inception, with a maximum loan-to-value ratio of 30% at the fund level for its value-add fund series.
The debt financing from HSBC UK will be used to acquire assets on behalf of Newcore’s fifth close-ended value-add fund, Newcore Special Situations V (NSS V), which achieved a £190 mln final close in May 2023 and marks the manager’s largest capital raise to date.
Investors in the fund included Local Government Pension Schemes, a FTSE 100 corporate pension scheme and European institutions.
Recent acquisitions by NSS V include South Mimms motorway service area, Hertfordshire, home to the UK’s largest EV Hub, a short-leased 5.6-acre (22,600 m2) Tesco supermarket in the Bromley-by-Bow regeneration area, East London, a school in Milton Keynes let to one of Newcore’s SEN operating partners and an NHS-backed GP surgery in Kent.
Neil Sarkhel, COO, Newcore Capital, said: 'The HSBC UK facility highlights that mainstream lenders are increasingly comfortable with social infrastructure as an asset class. The funding from HSBC, combined with the equity raised last year, provides us with significant firepower to deploy into creating functional assets that enable the provision of services critical to the dignified and orderly running of UK society.'
Newcore is the first dedicated UK real estate fund manager to achieve B-Corporation certification and is, as at Q2 2024, the highest-ranked certified real asset investment manager in the movement. The firm exclusively invests in social infrastructure assets that deliver essential services to communities, including education, healthcare, waste management, EV charging and storage.
Hugo Llewelyn, CEO, Newcore Capital, said: 'Our three-dimensional and long-term approach to sustainability – integrating social, environmental and financial considerations into our overall framework – has seen us adopt a low levered approach across our flagship value-add fund series.
'This has served our investors, tenants and underlying service users well through recent volatile times; and we believe that the strategy is likely to deliver stronger, long-term, risk-adjusted returns than tactical high-leverage strategies.'
Richard Holland, senior relationship director, real estate fFinance at HSBC UK, said: 'We are delighted for the opportunity to progress a banking relationship and loan facility with Newcore Capital for their fifth fund, and look forward to seeing both the business and our working relationship grow in the future.'
