Legal & General is aiming to complete up to 10 real estate debt financing deals a year following its debut transaction.
The fund manager has this week provided a new £121m loan to student housing group Unite. The 10-year debt facility is at 60% loan-to-value with a fixed rate of 5.05% for the duration of the loan, which will amortise to £109m, or 55% LTV, by 2022.
Ashley Goldblatt, who was appointed as the property division’s head of commercial lending in March last year, said that the division does not have a lending target, but that he expected it to be involved in “a modest number of larger-than- average-ticket sized deals”.
He said: “We are thinking about the value we can extract from real estate finance. It is far better to wait for the right deal to come along and then make it work than to try to hit a target.”
Goldblatt said that the firm had been offered around 150 prospective deals since it announced its long-awaited entry into the lending market last summer, and that it was currently in negotiations with “a number” of borrowers for follow-up deals.
He added that future facilities could be as short as seven years, going out to 15 or 20-year loans, and that the division would be targeting diversification across its lending book.
It is the second time in two weeks that an insurance company has provided a listed property company with long-term debt following Aviva’s provision of a £100m 15-year loan to self-storage REIT Big Yellow.
