Legal & General invests £70m in sustainable housing development

Written by Michael Griffiths

02/11/2022

LGIM Real Assets has announced a £70m investment in Saxon Weald in the form of sustainability-linked financing.

The funds are to accelerate the UK’s development of new, affordable energy efficient homes, Legal & General Assets stated.

Managing approximately 6,750 homes across Sussex and Hampshire, Saxon Weald is a housing association that provides affordable rented and shared ownership homes for individuals and families, as well as properties exclusively for the over-55s.

The proceeds of LGIM Real Assets’ investment will be used to finance new homes, designed to be energy efficient – with Saxon Weald targeting Energy Performance Certificate (EPC) ratings of A on all new builds.

This latest investment brings LGIM Real Assets’ investments with ESG-linked credentials in the corporate debt space to over £400m, spanning the social housing, higher education, and corporate sectors.

Head of corporate debt, Europe at LGIM Real Assets, Steve Bolton, commented: “There’s a stark, deep-rooted supply-demand imbalance when it comes to good quality, affordable housing in the UK. This, with the backdrop of rising energy bills and need to transition to a low carbon economy, demands innovation within the social housing sector.

“With an established track record and enduring appetite, we’re pleased to complete another significant investment in this space and further demonstrate our commitment to the future of the UK’s housing provision. This investment marks yet another example of inclusive capitalism at work, delivering a return to our pension holders whilst also benefitting our local communities.”

Centrus acted as the sole arranger and worked with Saxon Weald to develop the strategy and provide transaction advice. Legal counsel was provided by Devonshires and Addleshaw Goddard.

“The new funding forms a core part of delivering our sustainability strategy and in continuing our objective of providing affordable homes,” said executive director, resources at Saxon Weald, Michael Chinn.

“I’m particularly pleased with how well the teams at LGIM Real Assets and Centrus, assisted by Devonshires, structured the new funding to fit our aim to enhance the delivery of sustainable homes for our customers.”

Centrus senior director, John Tattersall, added: “We are delighted to have worked with the teams at both Saxon Weald and LGIM Real Assets to structure this sustainability linked private placement. The facility will help deliver more energy efficient, affordable homes across the Southeast of England, in addition to facilitating investment in the existing stock to further improve energy efficiency.”

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