L&G completes £350m industrial fund refinancing

By Bridging Loan Directory 24th July 2014

Legal & General Property (LGP) has completed the refinancing of its Industrial Property Investment Fund (IPIF), agreeing a new £275 million term part fixed rate, part floating rate facility.

The agreement is with three lenders – RBS, Wells Fargo and L&G’s lending arm, LGIM Commercial Lending Limited (CLL) – with an additional £75 million revolving credit facility provided by RBS and Wells Fargo which can be drawn down for future investment opportunities.

Replacing a £210 million facility that was due to expire in September 2015, the new £350 million loan facility is arranged over a six year term, supporting the fund through its recently extended life span and providing it with significantly increased firepower with which to seek attractive market investment opportunities.

RBS continues to be the principal debt provider and arranger, with a £95 million stake in the secured facility and 50 per cent share of the revolving credit facility, whilst L&G has increased its loan to £90 million (from £75 million).

Wells Fargo has come in as a new lender to the fund, providing £90 million of the secured facility and a 50 per cent share of the £75 million revolving credit facility.

The largest industrial fund in the IPD, IPIF has continued to be one of the most active investors in the UK industrial market, growing its assets under management from£920 million to over £1 billion since the beginning of the year. Launched in 1997, IPIF was one of the first indirect specialist real estate funds.

Towards the end of last year the fund merged with the Falcon Property Unit Trust, providing it with over 280 units over 36 multi-let estates.

Jonathan Holland, fund manager of IPIF, said:

“The fund has continued to lead the market in delivering strong outperformance through its careful stock picking of good quality, higher yielding multi-let industrial estates and highly proactive asset management programme. This new financing arrangement supports the fund through to the end of its life cycle and provides us with significant headroom with which to capitalise on attractive investment opportunities that we believe currently exist in the market.”

Nick Solomon, director at the Royal Bank of Scotland, said:

“RBS is delighted to lead this financing and continue our long standing relationship with Legal & General and IPIF, which continues to perform strongly. The financing positions IPIF well for the next stage of its lifecycle and demonstrates RBS’ continuing appetite for the UK real estate market.”