LGIM Real Assets has completed a €495.3m (£450m) refinancing for its Industrial Property Investment Fund, with the potential to extend the facility to €605.4m (£550m) subject to lender support. The debt facilities include a €220m (£200m) long-term fixed-rate loan, allowing investors to benefit from the low-interest-rate environment, and a €275.2m (£250m) revolving credit facility so the Fund can respond to market opportunities as and when they arise. Funding will be provided by a syndicate of relationship lenders including lead agent Wells Fargo Bank, as well as RBS International and Lloyds Bank.
The Fund, which is valued at over €2.5bn (£2.3bn), specialises in multi-let industrial and trade assets largely in the South East of England. As at the end of June 2020, it had delivered the highest returns in the AREF index over 3, 5 and 10 years, with for example the Fund delivering a return of 16.2% pa over the last 3 years compared to the PFI all-property index return of 3.9% pa. During the lockdown period, the Fund remained “open” and has received no redemption requests. New financing for the Fund was agreed following its conversion from a closed-end, fixed-life vehicle to an evergreen open-ended fund, allowing for more availability of finance options.
Jonathan Holland, Senior Fund Manager of IPIF at LGIM Real Assets, said: “The securing of a new debt facility for the Fund will help boost our investment capacity and take advantage of new market opportunities, including a rise in demand for e-commerce and last-mile warehouse facilities. The Fund has remained incredibly resilient during the lockdown period, continuing to significantly outperform the market, retain high occupancy levels and secure high-value deals across transport corridors in the South East of England. Over the coming months, we will continue to push forward with the Fund’s strategy, looking for new opportunities to broaden our leading position in the mix-box development market.”
Max Sinclair, EVP and Head of UK Commercial Real Estate (CRE), at Wells Fargo, said: “This is a high-quality business which continues to provide first-class returns to its investors, and despite challenging current market conditions it has shown strong resilience. Acting as the lead agent, we are delighted to have been given an opportunity to extend and deepen our relationship with IPIF alongside our co-lending peers.”
