abrdn plc’s Airport Industrial Property Unit Trust (AIPUT) has secured £350m of new debt financing from Wells Fargo to deliver a transformational investment programme for its prime industrial real estate portfolio in the United Kingdom.
The new Facility which consists of a split-term loan and revolving credit facility structure with an initial committed term of five years, will provide AIPUT with quick and flexible access to debt capital, in addition to existing capital sources, to finance its acquisition and renovation programme over the next five years. A number of opportunities to accelerate the fund’s capital growth and resilience are to be fast-tracked by expanding its portfolio of high-quality industrial real assets into existing and new major gateway locations with growing local populations, consumer spend and high barriers to entry; each one underpinned by exceptional and quick multi-modal transport connectivity covering both domestic and international markets. Wells Fargo is acting as lead arranger, underwriter and agent for this Facility.
AIPUT says it is committed to enhancing the operational efficiency and lower the environmental impacts of its property assets over its life. The sustainability-linked structure of the Facility has been designed to align and accelerate delivery of AIPUT’s flagship Net Zero Carbon Strategy to improve the portfolio’s energy efficiency by decarbonising the fund’s property-level operations (Scopes 1, 2, 3) by 2040.
A number of carefully customised sustainability-linked KPIs have been agreed with Wells Fargo, which will deliver a discount or an increase to the margin of the financing, based on achievement. The framework is expected to help AIPUT deliver smarter energy efficient buildings that attract and retain responsibly-focused tenants and their staff, improving the quality of the built environment with new features that reduce operational costs and environmental impacts and make better use of the planet’s scarce resources.
Fund Manager, Nick Smith, comments: “This strategic credit facility, combined with abrdn’s market leading investment expertise and operating platform, provides us with a wealth of financing options to execute our responsible investment strategy at scale and pace, forming a key pathway for AIPUT to become a net zero carbon business by 2040.
“We are delighted to be aligning AIPUT’s responsible investment strategy with Wells Fargo at this important time as we execute the next phase of our growth journey, and look forward to a highly successful partnership.”
Nick Stoneham, Head of Real Assets Debt Finance at the fund, says: “We are extremely pleased to be starting abrdn Real Assets’ relationship with Wells Fargo through this significant debt facility for one of our flagship Real Estate funds. Wells Fargo were able to offer a very attractive and efficient solution through a full initial underwrite of this large facility at competitive pricing, which right-sizes AIPUT’s debt provision for the coming five years in-line with its current debt strategy.”
Nicola Free, Head of Wells Fargo Commercial Real Estate for the EMEA region, adds: “We are delighted to have completed this sustainability linked financing with AIPUT by acting as the mandated lead arranger, underwriter and agent for this facility, which will support AIPUT’s commitment to further improve its green credentials and focus on improving its EPC rating, achieve BREEAM certification and reduce carbon intensity.”
AIPUT, a specialist investor in major transport and freight-related industrial real estate, holds a diverse portfolio of 23 properties located at four of the major gateway airport network markets in London and the South East.
The overall value of the fund currently stands at over £1.0 billion. AIPUT was the best-performing fund in absolute terms among AREF’s (Association of Real Estate Funds) members for calendar year 2021.
AIPUT is managed by abrdn plc (formerly, Standard Life Aberdeen plc – a United Kingdom-based global investment company headquartered in Edinburgh, Scotland, which is listed on London’s FTSE 250 stock market Index).