Aviva Investors provides £200 million of sustainability linked refinancing

By Bridging Loan Directory 28th October 2021

Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), announces it has agreed a £200 million facility with Primary Health Properties plc (“PHP”), a real estate investment trust (REIT), specialising in modern primary healthcare properties.

It is the latest investment by Aviva Investors as part of its sustainability-linked financing programme, which commits to originating £1 billion in climate transition real estate debt by 2025.

The 15-year facility is secured against 61 NHS Primary Care centres and refinances approximately £177 million in existing debt, also with Aviva Investors.

Similarly to other climate transition loans made by Aviva Investors, it features margin incentives conditional on a prescribed set of sustainability-linked KPIs being achieved by PHP.

PHP will benefit from margin reductions should it meet these goals, which will be reviewed annually over the full lifetime of the loan.

It has been made by Aviva Investors on behalf of Aviva’s UK Life business which specialises in bulk purchase annuities, savings and retirement, and protection, and is one of the central pillars of Aviva’s growth strategy.

The UK Life business secured £3.7 billion of bulk purchase annuities deals in the first seven months of 2021.

Gregor Bamert, Head of Real Estate Debt at Aviva Investors, said:

“We are pleased to have been able to build on our existing financing programme with PHP which not only furthers our sustainability-focused investment activity but, more importantly, provides a key healthcare facilities provider with the capital that can ensure UK healthcare patients continue to benefit from modern and well-appointed facilities.

We are encouraged by PHP’s commitment to sustainability improvements to its portfolio of assets.

Not only does this improve its own green credentials, it will also reduce the carbon footprint of our clients’ portfolios as we support the transition towards a lower-carbon economy.”

Marcus Mollan, Director, Annuity Asset Origination at Aviva, commented:

“Aviva’s annuity business pays lifetime pensions to a significant number of individuals in the UK.

To align with this long-term commitment to our annuity customers and pension scheme clients, we seek sustainable investments that are aligned with our path to net zero carbon.

We are delighted to have extended the term of our funding facility with PHP to 15 years, and are very pleased that Aviva and PHP have embedded a sustainability-linked incentive structure within the terms of the facility.”

Richard Howell, Chief Financial Officer of Primary Health Properties, added:

“We are delighted to have continued and extended our long-standing relationships with Aviva by refinancing our existing facilities.

Furthermore, we are proud to have secured our first sustainable loan facility, which will reward the Group via a margin reduction as we implement our Responsible Business plan and ESG initiatives which were published in February this year.”