Institutional Investment and Finance
Our knowledge of funding and investment markets can assist clients in sourcing debt and equity finance solutions for development-stage projects. We have a wide range of contacts to provide full market coverage, and the experience of our team allows us to provide deeper level of support that goes beyond simple debt broking – particularly on projects in the student accommodation and built-to-rent sectors. We are accustomed to working on complex projects and managing funders and other project stakeholders to successful transaction completion.
‘Income strips’ typically involve developers or asset-owners entering into an inflation-linked lease of c20-50 years duration with a funder, in exchange for an upfront capital premium. Institutional investors, including pension funds and other “long income” funds, have strong appetite for their stable long-term cashflows and inflation-linked returns.
From the borrower’s perspective, income strips provide a long-term funding option in a market where banks are largely constrained to shorter-dated lending – and are also normally free from financial covenant tests. They are typically secured against income-generating assets with demonstrable alternative use value, such as student residences or offices, although funders can be flexible in their requirements and a wide variety of deal structures are possible.
Our team has extensive market contacts and can assist you in considering, arranging and optimising income strip funding and other similar “ground rent”, sale and leaseback and forward funding transactions. Our recent deal experience includes:
- Financial advisor & arranger of £19m income strip for joint-venture with Herefordshire Council to fund 278 bedspace student accommodation and car park.
- Managing 3 phases of income strip transactions for Swansea University with M&G to fund 1,452 bedspaces and an International Pathway college academic facility.
- 10 other major transactions to raise more than £300m for student accommodation and social housing projects.