Legal & General Investment Management () has provided UK student accommodation operator Unite Group with a 拢400m (鈧�467m) loan to refinance a public bond.
LGIM said its UK and European real estate debt arm issued the loan to Unite to refinance the open-ended Unite UK Student Accommodation Fund鈥檚 (USAF) bond that matured this year.
Established in 2006, USAF鈥檚 portfolio comprises 28,000 beds in 68 properties in 19 university towns and cities in the UK. Unite holds a 28% stake and acts as the manager of USAF, operating its properties.
LGIM said the loan is secured against a portfolio of 23 purpose-built student accommodation assets in the UK.
LGIM鈥檚 insurer and financial services parent Legal & General made its first real estate debt financing deal in 2012. The maiden transaction involved providing a 拢121m 10-year loan to Unite, almost a year after LGIM established a dedicated property lending vehicle.
LGIM said the latest transaction extends its relationship with the Unite and also expands the loan book exposure to student accommodation, a 鈥渟ector that is expected to outperform in the medium term due to favourable demand and supply dynamics鈥�.
Libby Thelwall, senior investment associate at LGIM鈥檚 real estate debt division, said: 鈥淭his 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.鈥�
Gary Leadbeater, group treasury director of the Unite Group, said: 鈥淚t is fantastic to extend our relationship with LGIM, demonstrating our continuing leadership credentials in the sector.
鈥淎s the economy adjusts to a higher interest rate environment, this transaction further demonstrates our ability to access competitively priced capital in challenging market conditions.鈥�
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