LGIM’s dedicated UK and European Real Estate Debt division has completed a £400m loan for Unite to refinance a public bond for its flagship Unite UK Student Accommodation Fund, which matured in 2023.
The loan is secured against a portfolio of 23 purpose-built student accommodation assets across the UK, in key university towns and cities.
LGIM believes the PBSA sector is likely to outperform in the medium term owing to demand and supply dynamics.
The Unite Group is the largest UK 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.
Gary Leadbeater, group treasury director at the Unite Group, said: “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.”
Libby Thelwall, senior investment associate at LGIM, said: “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.”
Rothschild & Co acted as debt adviser to Unite, and Simmons & Simmons acted for LGIM Real Estate Debt.
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