Legal & General Investment Management has completed a £400m loan for Unite to refinance a public bond for its flagship Unite UK Student Accommodation Fund, which matured in 2023.

Unite is a student accommodation operator in the UK as well as an existing borrower of LGIM.

The transaction helps LGIM further expand its the loan book exposure to student accommodation, a sector LGIM expects to “outperform in the medium term due to favourable demand and supply dynamics”.

Libby Thelwall, senior investment associate at LGIM Real Estate Debt, said: “This investment shows our ability to provide competitive capital to owners of high-quality real estate and we are proud to originate a facility of this size against a backdrop of higher interest rates, tightening credit standards and uncertainty. We worked hard with Unite to provide a flexible but conservatively structured facility that suits both parties.”

The loan is secured against a portfolio of 23 student accommodation assets across university towns and cities in the UK.

Gary Leadbeater, group treasury director of the Unite Group, said: “As the economy adjusts to a higher interest rate environment, this transaction further demonstrates our ability to access competitively priced capital in challenging market conditions.”

USAF is a UK specialist student accommodation fund with 28,000 beds under management. The Unite Group is the largest shareholder of USAF and acts as asset and fund manager. 

Rothschild acted as debt adviser to Unite and Simmons & Simmons acted for LGIM Real Estate Debt.