Lloyds Bank has provided a £39.7 million loan to Scottish property developer HFD Property Group through its Green Lending Initiative, taking the total amount of lending from the £1 billion fund to £71.7 million.
The loan will fund development at the 38-acre Hamilton International Technology Park campus in the Scottish town of Hamilton in South Lanarkshire. The university campus is being constructed by the property firm as part of a partnership with the University of the West of Scotland and South Lanarkshire Council.
Three existing ‘EcoCampus’ buildings are being connected by a three-storey ‘street atrium’.
The three-year development loan has been provided through Lloyds Banking Group’s subsidiary Bank of Scotland. The loan is the largest yet to be provided through Lloyds’ green lending initiative. Under the terms of the deal, HFD will be eligible for a margin discount of up to 20 basis points providing it continues to meet specific sustainability covenants written into its agreement.
Lloyds’ green lending fund was launched in March this year. Through the initiative, Lloyds has ring-fenced £1 billion which will subsidise margin reductions in loans which finance properties meeting certain sustainability criteria.
In July, the first loan to be written through the initiative was a £17 million, four-year investment facility for fund manager Trinova Real Estate to fund the purchase of the Vulcan House office building in Sheffield from a private Irish trust for around £30 million.
The buildings at the Hamilton technology park have features such as rain water harvesting and renewable power from the development’s associated wind farm. The 225,000 square foot buildings are completed to shell and core. The first students expected in 2018.
HFD and the University of the West of Scotland have signed a memorandum of understanding to work towards incremental carbon reduction targets.
“Sustainability is a critical element of all HFD properties and the fact that Bank of Scotland is financially incentivising developers to improve the performance of the impact of the built environment reflects our established approach,” said Matt Bellshaw, director at HFD Property Group.
“We are a long-standing partner of HFD and after our Green Lending Initiative was launched we started working with them to see how they could leverage it for EcoCampus,” added Allan MacKenzie, head of Scotland and the North at Lloyds Bank Commercial Real Estate.
Last week, Lloyds and HFD announced a separate financing deal for an office scheme in Aberdeen. In that agreement, Lloyds’ Scottish Widows business, through its partnership with Bank of Scotland, provided a £54 million, ten-year loan to refinance the recently-completed 216,000 square foot office scheme, Sir Ian Wood House.