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LGIM boosts build-to-rent programme with £265m loan

A 346-apartment Build-to-Rent (BTR) scheme at Candleriggs Square, Glasgow being developed for L&G by Drum Property Group and Stamford Property Investments.

LGIM Real Assets has arranged a £265 million (c€310 million) club facility on behalf of its Build to Rent Fund. Lloyds, Natwest and ING are putting up the money in what LGIM said signals ‘a turning point’ as the fund’s portfolio evolves from being development centric to an investment centric.

The debt facility is to be allocated against eight of the fund’s operational assets – in Salford, Manchester, Bath, Walthamstow, Bristol, Leeds, and Birmingham – and will comprise a £150 million term facility and a £115 million revolving credit facility. Most of the funds will be used to refinance £220 million of existing development loans.

The Build to Rent Fund has over 5,000 homes across 15 schemes in the UK, which LGIM said bolsters its continued commitment to the regions, the UK government’s levelling-up agenda, and the growing strength of regional hubs across the UK.

LGIM’s build-to-rent fund grows ‘exponentially’

Since its inception in 2016, the BTR Fund has grown exponentially LGIM said, and despite the coronavirus pandemic, in 2021 has welcomed its first residents to Mustard Wharf in Leeds and Box Makers Yard in Bristol, and it has completed the final phase of The Slate Yard in Salford. Over £150 million has been committed to investments in Birmingham and Leeds. The portfolio is worth over £2bn and there are 7,500 homes in the pipeline for delivery by 2025.

“As we prepare for economic recovery, greater investment in the UK’s regional cities – particularly to deliver vital new housing – is needed,” said LGIM Real Assets senior fund manager Dan Batterton. “The BTR sector has continued to present itself as solid investment proposition; with the fundamental backdrop of continued pressure on UK housing, this isn’t set to dwindle,” he added.

Lloyds acted as documentation coordinator and agent and Lloyds, Natwest and ING were mandated lead arrangers.