Aviva Investors completes £72.9 million sustainable transition loan facility with Commercial Estates Group

(London) – Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), has announced the completion of a £72.9 million sustainable transition loan agreement with Commercial Estates Group (‘CEG’), the property investment management and development company.

The senior debt facility, which is provided over seven-year fixed- and floating-rate tranches, forms part of Aviva Investors’ commitment to originating £1 billion in sustainable transition real estate debt over the next four years following the launch of its proprietary Sustainable Transition Loans Framework in December last year.

The transaction is structured with KPIs that are linked to sustainability improvements on assets in the portfolio. CEG will benefit from a margin reduction for delivering specific targets which will be assessed annually throughout the life of the facility.

Whilst CEG will use the loan proceeds to refinance a portfolio of six regional office assets, a portion of it will part-fund the development of Globe Point, a 37,842 sq ft Grade A office in the Temple area of Leeds, which forms the first part of a £350 million project by CEG. The iconic seven-storey building will deliver office space with ground floor break-out space, a café, and will aim to achieve a BREEAM excellent and EPC A rating.

The six regional office assets are located in strongly performing markets such as Liverpool and Bristol, and feature a highly granular mix of over 100 tenants. CEG has invested heavily in the assets to provide modern flexible space with a focus on amenity and wellbeing that appeals to occupiers.

Aviva Investors is providing the financing on behalf of a number of third-party client mandates, which it expects will benefit from a strong and predictable income streams.

Gregor Bamert, Head of Real Estate Debt at Aviva Investors, said:

“We are pleased to have an opportunity to work with CEG through the provision of this sustainability linked loan, following active discussions over a number of years. CEG have a stated commitment to sustainability and improving the green credentials of its portfolio, which both parties were keen to incorporate into the loan. It is also pleasing to be able to fund the development of a new high-quality asset such as Globe Point. Despite short-term headwinds in the local office market, we are confident this portfolio will perform strongly given CEG’s active management capability and the quality of buildings it produces.”

Gerard Versteegh, Chairman of Commercial Estates Group, commented:

“We are delighted to be working with Aviva Investors as a strategic partner. We expect this will lead to a long, fruitful collaboration on many more projects to come. Our approach to sustainability is ambitious and embedded into everything we do. We continue to push the innovation boundaries to ensure well-being, technology and sustainability are at the heart of Globe Point.”

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Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (“Aviva Investors”) as at 11 April 2022. Unless stated otherwise any views and opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. 

Issued by Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: 80 Fenchurch Street, London, EC3M 4AE. Authorised and regulated by the Financial Conduct Authority.

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Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £268 billion in assets under management as at 31 December 2021.

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Issued by Aviva Investors Global Services Limited, registered in England No. 1151805. 
Registered Office: 80 Fenchurch Street, London, EC3M 4AE. Authorised and regulated by the Financial Conduct Authority and a member of the Investment Association.

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