Global investment manager Allianz Global Investors (AllianzGI) has invested £119.7 million (US$188 million) of bonds backed by rents from a student accommodation project at the University of Exeter, UK.
The investment is the first for AllianzGI's UK Infrastructure Debt Fund, which was started on 30 June. AllianzGI is looking to invest £3 billion (US$4.7 billion) in UK infrastructure in the next three to five years.
The bonds were sold by a unit of UPP Group Holdings Ltd. Paul David, Director of Infrastructure Debt at AllianzGI stated:
We're pleased to have completed the first investment from our UK Infrastructure Debt Fund in what is, for us, a new and exciting sector. There is a significant undersupply of student accommodation in the UK and we are delighted to be working with UPP and the University of Exeter to help address this issue. We also look forward to participating in more deals like UPP's Exeter facilities at the premium end of the market.
This investment illustrates the growing maturity, complexity and diversity of AllianzGI's infrastructure debt business in the UK. It demonstrates that we are delivering on our commitment to put money to work in critical infrastructure across the country in a range of sectors.
The Exeter student accommodation project were completed in 2012. The facilities include 2,600 student rooms.
According to Allianz GI, the investment was structured as a private placement under UPP Group Holdings' existing listed £5 billion program backed by rent from about 11,700 rooms at seven U.K. universities.
The funds will be used to replace existing bank debt for the construction and maintenance of the accommodation that closed in 2009.
Phil Dawes, Head of UK Institutional at AllianzGI, commented:
AllianzGI continues to lead the UK infrastructure debt market in terms of both origination and execution. With a blend of utilities, brownfield and greenfield transactions our clients have seen their commitments turn into real assets across the country, which in turn will have a tangible impact on both their portfolios and economic growth.
Across Europe, our team have now committed capital for the provision of a 63,000km electricity network, 210km of motorways, 79 bridges, 80,000 square metres of government accommodation, a 4,200km gas network, 2,600 student rooms, 3 tunnels and a viaduct.