AIPUT secures £350m debt financing to grow portfolio

Abrdn’s Airport Industrial Property Unit Trust has obtained £350m in new debt financing from Wells Fargo to finance a major investment programme for its prime industrial real estate portfolio in and around the UK’s busiest airports. The sustainability-linked credit facility consists of a split-term loan and revolving credit facility structure, with an initial committed term of five years. Wells Fargo is acting as lead arranger, underwriter and agent for the financing. The deal will provide AIPUT with quick and flexible access to debt capital, in addition to existing capital sources, to finance an acquisition and renovation strategy over the next five years. AIPUT said it was seeking to expand into existing and new major gateway locations with growing local populations, consumer spend and high barriers to entry, underpinned by multi-modal transport connectivity covering both domestic and international markets. As part of the deal, the fund has agreed sustainability-linked KPIs with Wells Fargo that will deliver either a discount or an increase to the margin of the financing based on achievement. The framework is expected to help AIPUT deliver smarter energy-efficient buildings. The fund is aiming to decarbonise its property-level operations by 2040. Nicola Free, head of Wells Fargo commercial real estate in EMEA, said the facility would “support AIPUT’s commitment to further improve its green credentials and focus on improving its EPC rating, achieve BREEAM certification and reduce carbon intensity”. Nick Smith, fund manager at AIPUT, said: “This strategic credit facility, combined with abrdn’s market-leading investment expertise and operating platform, provides us with a wealth of financing options to execute our responsible investment strategy at scale and pace, forming a key pathway for AIPUT to become a net zero carbon business by 2040.” Nick Stoneham, head of real assets debt finance at abrdn, said: “Wells Fargo was able to offer a very attractive and efficient solution through a full initial underwrite of this large facility at competitive pricing, which right-sizes AIPUT’s debt provision for the coming five years in line with its current debt strategy.” AIPUT’s portfolio consists of 23 properties located at four of the major gateway airport network markets in London and the South East. The overall value of the fund stands at more than £1bn.   To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Image from AIPUT/The Communication Group