LGIM’s UK and European Real Estate Debt division has provided a £400m facility to Unite to refinance a public bond for Unite’s flagship Unite UK Student Accommodation Fund (USAF), which matured in 2023.
LGIM said the loan is secured against a portfolio of 23 purpose-built student accommodation 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 they believe is likely to outperform in the medium term due to favourable demand and supply dynamics.
The Unite Group is the largest UK Purpose-built student accommodation (PBSA) operator and USAF is the UK’s largest specialist student accommodation fund with 28,000 beds under management. Established in 2006, USAF is one of the top performing funds in the MSCI UK Specialist Fund Index. 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: “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: “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.”
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