Legal & General (L&G) has agreed a GBP25 million, 40-year loan to Adactus Housing Group, its sixth direct investment deal in the social housing sector.
L&G has invested circa GBP500 million in social housing in just over 18 months, through five loans and one equity deal.
The loan is secured against a portfolio of existing assets and will be used to refinance an existing short term loan, which is maturing this year, as well as to provide Adactus with further capital to support its development pipeline. Its on-going development programme is set to deliver 1,500 units by 2018.
Alex Gipson, lending manager at Legal & General, says: "It was obviously important to us that Adactus had a clear business model and strong financial footing. What’s more, what excited us about working with them was the clear sense that merely maintaining the status quo was not an option to the board and executive team. From discussions it is clear that seeking continuous improvements in every area of their business is part of their DNA."
Paul Chisnell, group director of finance at Adactus Housing Group, says: “As we look to continue to deliver much needed development, we have diversified our funding sources and this loan reflects a significant step forward for us. This is not purely a financial transaction but a commencement of a partnership between two organisations with a shared vision for bringing about real improvements to the UK's housing market."
The deal closes only a week after L&G announced a GBP40million, 20 year debt facility to Rooftop Housing Group.
Other recent social housing deals concluded by L&G have included a GBP50 million, 40 year debt facility to Housing Solutions, a GBP102 million, 15 year debt facility to The Hyde Group and a GBP40 million, 25 year debt facility to Thames Valley Housing Association.
It also recently secured a portfolio of over 4,000 housing units, let to Places for People on a new 50 year lease, for GBP252 million.
Adactus was advised by Edmond de Rothschild Corporate Finance, London. The legal firm acting for Adactus was Trowers and Hamlins, whilst Pinsent Masons advised L&G.