LGP secures additional debt facility to complete ukpif's investment programme.
16 January 2013
Legal & General Property (LGP/the Company) announces the successful £63 million addition to the debt facility of its UK Property Income Fund (the Fund/the UK PIF), with Santander, taking the total facility size to £177 million.
Santander, which is a new lending partner to LGP, has joined a “hunting license” facility with Eurohypo, which expires in 2017. The all-in cost of borrowing is estimated at 4% for the duration of the loan, which looks very attractive against the yields on offer via the Fund’s focused strategy of targeting well-located, larger lot size assets with strong income dynamics. The new loan provides capacity to continue to seek market opportunities to finalise the investment programme for the Fund, thereby completing the UKPIF’s investment objectives.
Reaching final close at the end of 2011, having secured a total of £300 million of equity from 14 major international institutional investors based in the Middle East, Denmark, UK, France, Finland, Switzerland and Japan, the UK PIF has a total investment capacity of circa £475 million. This new debt facility is further evidence of the success of the innovative gearing structure of the Fund, which allows investors to choose their preferred level of gearing of between 0% and 50% Loan to Value (LTV), offering a unique solution to accommodate a range of risk appetites. The Fund aims to provide investors with returns of 15% (geared) and 10% (ungeared) through careful stock selection of large lot size assets, capitalising on the economic recovery in the UK based on a core/core-plus risk strategy.
Since inception in March 2010, the Fund has significantly outperformed its peer group, the IPD Quarterly Universe, by 7.7%. To date it has acquired assets totalling circa £313 million. All located in the South East of England, these include:
- 1 City Place in Gatwick and St George’s House in Croydon
- The Meadows Shopping Centre in Chelmsford
- Fremlin Walk Shopping Centre in Maidstone
- Guildford Business Park in Guildford
- Co-op distribution centre in Andover
Charlie Walker, Director of Business Development and Fund Manager of the UK Property Income Fund, comments: “Our first deal with Santander, this facility demonstrates not only their flexible approach to lending, but also LGP’s access to debt at an interesting time within the debt markets. Whereas most lending appetite is currently focused on simple, large, longer let assets within central London Santander has shown that it is prepared to lend on assets across the country, where the fundamentals are right.”
Notes to editors
Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £381bn of assets on behalf of more than 3,300 clients (30 June 2012) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 16 separate funds or vehicles and two segregated mandates with an aggregate asset value of £10.4bn as at 30 September 2012.
These funds include:
Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; Arlington Business Parks Partnership; and the English Cities Fund
Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership; Performance Retail Limited Partnership and Warrington Retail Limited Partnership
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust; UK Property Income Fund; LPI Income Property Fund and the Hybrid Property Fund
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance across the sector. Owing to its size, diversity and penetration, it benefits from best in class banking and property industry contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities. Taking a client-centric approach, the business places the highest priority upon integrity and transparency, leveraging upon the significant resources provided by the wider LGIM platform. Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability.
LGP’s sector specialisms cross all facets of the real estate market. In particular, the Company has a major development platform, responsible for delivering the West End office market’s latest landmark, Central Saint Giles, and currently involved in developing its high profile Covent Garden scheme, Agar Street, as well as significant town-centre retail and leisure regeneration projects, including Bracknell, Trowbridge, Northampton, Hounslow and Eastbourne.
For more information please contact:
PR Manager, Legal & General Capital and Real Assets, LGIM (Property, infrastructure and alternative finance)
t: + 44 (0) 203 124 2777
m: + 44 (0) 7718 395 279
About Legal & General
Legal & General Property Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.