Legal & General (“L&G”) announces that it has agreed a £40 million, 25 year debt facility to Thames Valley Housing Association (“TVHA”), one of the largest housing associations in London and the South East, as it continues to grow its presence in the sector as part of its commitment to investing in the UK’s housing infrastructure.
Secured by schemes in Hammersmith and Tooting, providing high quality key worker accommodation for Imperial College NHS Trust and St George’s Healthcare NHS Trust respectively, the loan will be used to support TVHA’s ongoing development activity, enabling it to build over 500 new units of affordable housing. An innovative deal, it is believed that this is the first time that institutional finance has been provided to the housing association sector where it has been specifically structured and secured against key worker accommodation.
Formed in 1966, today, based in Twickenham, TVHA owns, manages or takes care of loans for over 14,500 homes in London, Berkshire, Surrey, Hampshire, Oxfordshire, Buckinghamshire, Wiltshire and Sussex. These include traditional rented housing, shared ownership, key worker and student accommodation. As part of this, working with NHS Trusts in London and the South East, TVHA currently provides modern, purpose-built, well maintained key worker accommodation to eight NHS Trusts, including Imperial College, St George’s and Nuffield Orthopaedic Hospital in Oxford.
As a long-term provider of investment capital, Legal & General has invested over £3.5 billion in UK infrastructure projects to date and is one of the six UK insurers committed to investing £25 billion in the UK by 2018. With a clear cut intention to make a material contribution to solving the UK housing crisis, this deal follows L&G’s £102 million, 15 year debt facility to The Hyde Group last year, and forms just one of a number of ways in which the Company is looking to invest in the residential market, including build-to-sell, build-to-rent, large scale inner city regeneration and student accommodation.
Jack Stephen, Finance Director and Deputy Chief Executive, Thames Valley Housing Association, commented: “The housing crisis is particularly acute in London & the South. By building good quality, new homes and managing them well, we believe that we can significantly grow the social capital of the communities we work in and in turn help to solve the chronic shortfall. When considering our on-going funding requirement we had a range of options available to us. Key to us in working with Legal & General was that they understood the specific objectives we had in raising finance against these particular assets and worked with us to make sure those objectives were met.”
Alex Gipson, Social Housing Lending Manager at Legal & General, added: “Helping to deepen our investment into the UK’s social housing sector and infrastructure more generally, we were impressed with the quality of accommodation and service delivered by TVHA, and the key relationships developed with the two Trusts. This enabled us to understand the strong value and cash generation of the key worker schemes and create a bespoke funding arrangement, thereby meeting TVHA’s specific requirements.”
Centrus Advisors LLP acted as financial advisor to TVHA on the transaction.
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