Press releases

800 new home pipeline for Chorley Community Housing funded by Legal & General

Legal & General has today announced a £50 million, 40 year loan to Chorley Community Housing Ltd (CCH) to fund a pipeline of 814 new homes over the next three years in the North West of England.

The homes will be built with annuity money, and the return on the loan will be used to pay pensioners annuities. This investment match produces a better return for our pensioners than investing in gilts, and provides real economic growth for the UK by creating much needed new housing.

Kerrigan Procter, Managing Director, Legal & General Retirement, said:  "The UK has a chronic shortage of housing across all tenures. At Legal & General we are playing our part in changing this. Annuity money is ideally suited for investment in housing and infrastructure, as it can be invested for 20, 30 or 40 years, delivering economic growth and increased pensions for retirees."

Paul Chisnell, Group Director of Finance at Adactus Housing Group, commented:  "Having bedded down the stock transfer, completed the initial stock improvement programme ahead of schedule and promises to tenants, CCH is now looking to play a much greater role in meeting the demand for quality affordable accommodation in the area.

"Given the scale of CCH’s growth ambitions, in relation to its current asset base, we needed a level of flexibility in the early years of this development phase not typically demonstrated by institutional lenders to the sector. Building on the existing relationship developed with L&G, we were delighted to be able to work with them to create that flexibility in order to closely support the business model going forward."

Housing is a key asset for the UK, and it’s important to the success of the UK that our housing stock is significantly improved and expanded. Legal & General is now active in many parts of the housing market in the UK, including: building homes to rent and sell; providing finance for affordable homes; care homes and key worker accommodation and building and leasing student accommodation. Legal & General also owns CALA Homes, a top ten housebuilder.

Legal & General’s lending arm, LGIM Commercial Lending Limited ("CLL") are providing the funding to Chorley Community Housing Ltd, a subsidiary of Adactus Housing Group Ltd. The financing is secured against a portfolio of existing assets as well as CCH’s housing development pipeline. The loan includes flexibility tailored to the borrower’s development activities, with a deferred drawdown profile through to December 2016 and asset cover tests against a combination of properties completed and in development.

Alex Gipson, Lending Manager at Legal & General, said:  "From the outset, one of the main aspects that attracted us to working with the Group is their progressive attitude. Having made a major commitment to supporting UK housing and infrastructure, L&G chooses to partner with forward thinking operators who play a part in driving economic growth and maintain enduring business models. Having seen the developments that CCH are delivering at first hand, it is easy to see the positive impact being made within the local communities they touch. Their approach has quite rightly been recognised by their recent award and is also reflected by their commitment to delivering new, quality, affordable housing."

This is CLL’s second lending deal to the Adactus Group, and follows a £25 million, 40 year loan to Adactus Housing Association Ltd in July last year. CLL has now invested a total of over £1.2 billion across 14 deals. Transactions include seven loans to the social housing sector, two loans to the student accommodation sector, two hotel debt deals and a loan to the care home market.

CCH was formed in 2007 to receive a Large Scale Voluntary Transfer of Chorley Borough Council’s housing stock. The Association employs 80 staff directly and manages over 5,420 homes in/around the Chorley district. Adactus Housing Group is a regional housing group that is active across 21 local authority areas in the North West of England, with roots dating back to 1964.

The Group as a whole is one of the largest associations in its region, managing over 13,000 units and employing around 600 staff. The Group is committed to leveraging its assets to create more, much-needed affordable housing and recently won at the 2015 Housing Association National Accountancy Awards for ‘Achieving Best Value for Money’.

CCH was advised by Edmond de Rothschild Corporate Finance, London. The legal firm acting for CCH was Trowers and Hamlins LLP, whilst Pinsent Masons advised L&G.

-Ends-

 

NOTES TO EDITORS

Legal & General Group Plc

Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £16.5bn (as at 5 March 2015) and is responsible for investing £709bn worldwide (as at 31st December 2014) on behalf of investors, policyholders and shareholders. We have over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2014, Legal & General's operating profit (on the IFRS basis) was £1,275m and earnings per share were 16.70p for the period, an increase of 10% for both respectively.

For more information on Legal & General, please see

http://www.legalandgeneralgroup.com/ 
Forward looking statements

Nothing in this announcement should be construed as a profit forecast. This document may contain certain forward-looking statements relating to Legal & General Group, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries.   As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.    For further information, please contact:

MEDIA:

Richard King Head of Group Corporate Communications 020 3124 2095

For more information please contact:

OLIVIA GOODALL
PR MANAGER, LEGAL & GENERAL CAPITAL AND REAL ASSETS, LGIM (PROPERTY, INFRASTRUCTURE AND ALTERNATIVE FINANCE)

t: + 44 (0) 203 124 2777
m: + 44 (0) 7718 395

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