Legal & General’s lending arm has provided a £75m loan to refinance five hotel assets at Gatwick and Stansted airports.
The 20-year loan reflects a 78% loan-to-value. It has a “bullet repayment” on expiry when all of the loan will be paid back in a lump sum. The loan has been taken out by a private client. The hotels are let on long leases with turnover agreements.
Legal & General is steadily establishing itself as a major source of long-term finance in the UK real estate market, its loanbook having now hit the £1.5bn mark after just over three-and-a-half years in the market.
Steve Boyle, real estate lending manager at Legal & General, said: “These five assets are extremely well positioned for airport traffic. The rents are set at a low percentage of turnover, with plenty of upside, which has enabled the high gearing. We were hit with a last minute request for a change of loan term, which we accommodated, showing a flexibility which the client very much appreciated. We look forward to building on this new relationship.”
The deal is the second hotel lending transaction completed by Legal & General and follows a £37.5m, 10-year loan secured against the Hilton London Heathrow Airport Terminal 5 hotel completed at the end of 2014.