Urban Logistics REIT has secured a £57m sustainability-linked loan from Aviva Investors, marking the pair’s fifth green financing deal since establishing a lending relationship in 2021.
The new loan, a nine-year facility, is secured against a portfolio of 10 logistics properties across the UK, totalling more than 900,000 sq ft.
The loan includes a commitment from the REIT to undertake sustainability improvements across the 10 assets being lent against, as well as 23 additional properties from previous tranches of financing that were not sustainability-linked.
The businesses said the lending programme between the two businesses is now aligned with Aviva Investors’ sustainable transition loans framework and Urban Logistics’ ESG targets.
Gregor Bamert, head of real estate debt at Aviva Investors, (pictured) said: “We are happy to extend our lending programme with Urban Logistics through this new loan, but also to have brought everything under our sustainable transition loans framework, showing its commitment to continue enhancing the sustainability credentials of its assets.
“Despite relatively subdued activity in the lending market, this agreement shows that opportunities still exist to invest with established and high-quality borrowers. The REIT market’s asset management capabilities and focus on improving sustainability across its portfolio provides a solid foundation for growing lending activity with this sector.”
Richard Moffitt, chief executive at Urban Logistics’ investment adviser Logistics Asset Management, said: “In challenging economic times, we focus on our area of expertise: active asset management of single-let, last-mile logistics. To enable us to do this we have worked with Aviva Investors for a number of years, taking out competitively priced, fixed-term debt, reducing the REIT’s exposure to interest rate volatility.
“This refinance allows us to do exactly this, moving the total debt book to an all-in cost of 4.2%, 93% hedged or fixed to term, while the sustainability link further embeds our ESG targets across the business.”
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