Legal & General has completed a £24.5 million, seven-year bilateral loan to Citygrove, which the firm’s head of real estate lending, Ashley Goldblatt (pictured) said shows the insurer’s ability to provide shorter-term finance.
The facility reflects a loan-to-value ratio in the region of 50 percent.
With an immediate drawdown, the loan is secured against three office buildings in Cirencester and Newbury, which are let to wealth manager St James’s Place on long-term leases, and a David Lloyd Centre leisure centre based in Luton, which is also let long-term.
The loan, arranged by L&G’s Private Credit business, which is part of LGIM Real Assets, refinances existing bank debt from Close Brothers Property Finance.
The seven-year deal “makes sense” for the insurer as it can provide short-term loans, which is “unusual” for peers with long-term liabilities, said Goldblatt, head of commercial lending at LGIM Real Assets.
“This transaction further demonstrates our ability to continue to move into areas that the market might not traditionally expect to see us in – in this case, a loan term more normally associated with banks,” Goldblatt said.
“We are able to invest at the short, medium and long edge of the curve, as well as across alternative asset classes, demonstrating the breadth of our lending capabilities,” he added.
LGIM Real Assets’ property lending business has lent more than £2 billion across 21 deals. Prior to the Citygrove deal, the insurer provided acquisition finance for Deutsche Finance International and Yoo Capital’s £296 million purchase of the Olympia London exhibition centre.