International law firm Trowers & Hamlins has advised Urban Logistics REIT Plc in relation to the grant of a new £48 million sustainability linked investment loan by Aviva Investors.
The facility is to be used for the purpose of refinancing the group's recent acquisition of a portfolio of 14 UK real estate assets. This loan follows a £151 million commitment from Barclays, Santander and Lloyds in August 2020, which was secured to drive future investment and expansion of the aim listed industrial and logistics group.
The new facility, which provides a seven year term and comes at a fixed cost of 2.34% per annum, includes a commitment from Urban Logistics to work towards meeting various environmental, social and governance criteria - adherence to which could see Urban Logistics benefit from margin reductions under the facility. It follows the launch of Aviva Investors’ Sustainability-linked Loans framework in December as part of its commitment to originating £1 billion in sustainable transition real estate debt over the next four years.
The new loan also incorporates an accordion mechanism which could allow Urban Logistics to increase the total commitment by a further £150 million.
Christopher Turner, an executive director of Urban Logistics REIT, commented:
“We are delighted to have agreed a new debt facility with Aviva and we hope this relationship will continue to grow as we maintain our focus on building a unique platform of UK single let last touch logistics assets. The sustainable element is entirely in line with our drive towards adding ESG to the front of our investment policies. This new loan incorporates a £150m accordion element which will enable us to grow and strengthen this relationship."
This funding comes at a time when demand for logistics-backed solutions has never been stronger, with the recent shift towards online shopping, brought about in part by Covid-19 related lockdown restrictions, generating continued interest and investment in the UK's thriving industrial and logistics market.
The transaction involved a large number of properties and several of Urban Logistics' subsidiaries.
Banking and Finance Partner, Eddie O'Hanrahan, added:
"This financing comes at a time when the industrial and logistics market is experiencing tremendous growth. We're delighted to have been able to assist Urban Logistics with this latest deal, which follows hot on the heels of their £151m financing where we also led on the negotiations. The transaction is also reflective of the noticeable increase in the demand for sustainable finance and we're thrilled to play a part in the growth of this thriving market."
The deal was brought through to completion thanks to a collaborative cross-departmental effort from Trowers & Hamlins' Banking & Finance and Property teams and with support from a number of other law firms and professional advisors.
Eddie O'Hanrahan led the Trowers team and was assisted by Claire Ezekwe, Jonathan Grosvenor and James McKelvie on banking elements whilst real estate expertise was provided by Ben Neary, with support from Jasmin Andrews.
