Life Science REIT has agreed a £150m debt financing facility with HSBC.
The facility, the REIT’s first, is split evenly between a £75m three-year loan and an equally sized revolving credit facility. The combined interest rate equates to 2.9%.
The debt facility is currently undrawn but gives the REIT additional firepower to buy properties across the Golden Triangle of Oxford, Cambridge and London.
The facility is secured on the properties already acquired by the company since its IPO in November. The borrowing structure allows the REIT to flexibly add new properties to the security pool to reach its optimal gearing target as it acquires new assets.
Simon Farnsworth, managing director of Ironstone Asset Management, Life Science’s investment adviser, said: “The company has a prudent approach to gearing and is targeting a LTV ratio of 30-40% over the longer term. The debt facility announced today provides us with the flexibility to improve the efficiency of our balance sheet as we continue to make significant progress on a number of acquisition opportunities whilst also enhancing our financial resources.”
As of 31 December, the REIT’s portfolio stood at £192.2m, a £14.5m increase in the six weeks since its IPO.
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