L&G secures £270m green finance for £500m Wandsworth BTR

Legal & General’s build-to-rent platform has secured a £270m green development loan for a £500m scheme in Wandsworth, SW18. The green debt facility will be used to fund the development of the former B&Q and Homebase sites, which LGIM bought from Railway Pension Trustee Company and National Grid UK Pension Scheme in 2019. LGIM Real Assets arranged the four-year, £270m green development financing with HSBC, NatWest and Standard Chartered. Dan Batterton, head of residential at LGIM Real Assets, said: “The debt facility demonstrates the BTR sector’s solid investment proposition where the existing imbalance between demand and supply continues to support growth.” Phil Hooper, head of real estate at NatWest, said: “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.” The Wandsworth scheme is one of L&G’s five BTR schemes in London and will be LGIM’s largest residential development to date. The scheme will deliver more than 1,000 homes, 35% of which will be affordable, and more than 60,000 sq ft of commercial space. Construction already under way, with the first homes due to be ready for occupation in 2023. Under the Loan Market Association’s Green Loan Principles, the proceeds must be used to finance green buildings which meet regional, national or internationally recognised standards or certifications for sustainability. “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,” Batterton said. UK’s largest BTR investor In 2021, LGIM Real Assets was the UK’s largest BTR investor, committing £700m to the sector, across more than 2,000 new flats in six developments. Last year’s acquisitions included sites in Birmingham, Glasgow, Hove, Southampton, Lewisham and Stratford. In total, LGIM Real Assets has committed £2.5bn to the BTR sector to date, with 20 sites in 12 cities. More than 2,500 flats are already occupied, with over 6,000 more under construction. LGIM Real Assets also secured a mandate with Legal & General’s retirement business, LGRI, for a further £2.5bn investment into BTR in February 2022, delivering another 7,000 new homes over the next five years. Batterton said: “We are redoubling our commitment to BTR following an exceptional year as the largest BTR investor with the largest number of new leases across the market. 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.” LGIM Real Assets’ BTR Fund secured more new leases than any other BTR landlord in 2021, with almost 2,000 households moving in. Its portfolio achieved 2.2% rental growth over the same period. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Image from LGIM Real Assets