LGIM Real Assets (Legal & General Investment Management), on behalf of its Build to Rent platform, has arranged a four year, £270m green development financing from a banking group consisting of HSBC, NatWest and Standard Chartered. HSBC and Standard Chartered acted as joint Sustainability Coordinators while NatWest acted as Documentation Coordinator and Agent.
The green debt facility will be used to fund the development of the £500m Wandsworth Build to Rent scheme. The funding is aligned to the Loan Market Association’s Green Loan Principles – and is one of the largest sustainable finance facilities in the housing sector to date. Eligibility under these principles specify that loan proceeds are to be used to finance green buildings which meet regional, national, or internationally recognised standards or certifications for sustainability.
“We are delighted to support LGIM in the delivery of over 1,000 new Build to Rent homes. The sustainable nature of the assets is testament to LGIM’s transition to a zero carbon economy and we are therefore pleased to complete the financing as a green loan.”
Phil Hooper, Head of Real Estate, NatWest – speaking on behalf of the lending group
Construction work is already underway for the new scheme at the former B&Q and Homebase sites, which are one of Legal & General’s five Build to Rent schemes in London. The Wandsworth scheme marks LGIM’s largest residential development to date. The development will deliver over 1,000 Build to Rent homes – 35% of which will be affordable. The scheme will also include 60,000 sq ft of commercial space. The first homes are expected to be ready for occupation in 2023.
“The debt facility demonstrates the Build to Rent sector’s solid investment proposition where the existing imbalance between demand and supply continues to support growth. We’re redoubling our commitment to Build to Rent following an exceptional year as the largest Build to Rent investor with the largest number of new leases across the market.
“The apartments will be designed with a focus on lifestyle and resident satisfaction, delivering higher standards of design, service, and asset management, operational efficiency, and long-term environmental sustainability with operational net zero carbon targeted by 2030.
“In keeping with our Inclusive Capitalism purpose, we want to help tackle the UK’s housing crisis, create new neighbourhoods and bring brownfield sites back into effective use. This will also support local authorities in meeting their housing targets.”
Dan Batterton, Head of Residential, LGIM Real Assets
In total, LGIM Real Assets has committed £2.5bn to the Build to Rent sector to date – with 20 sites in 12 cities. Over 2,500 apartmentsare already occupied, with over6,000 under construction. The company reports that its Build to Rent Fund has secured more new leases than any other Build to Rent landlord in 2021, with almost 2,000 households moving in. Its portfolio achieved 2.2% rental growth over the same period.
LGIM Real Assets was the UK’s largest Build to Rent investor in 2021. The company committing £700m to the sector across over 2,000 new apartments in six developments. Last year’s acquisitions included sites in Birmingham, Glasgow, Hove, Southampton, Lewisham, and Stratford.
In February 2022, LGIM Real Assets also secured a mandate with Legal & General’s retirement business for a further £2.5bn investment into Build to Rent, which will deliver another 7,000 new homes over the next five years.
