£169 million residential finance on ground rents and student accommodation properties
We underpinned the transaction with a derivative which secured future rental income growth and were therefore able to achieve higher gearing.
This large real estate company had built up substantial portfolios in ground rents and student units let out to universities. The rental income for both portfolios was linked to the retail price index (RPI). By using a derivative product, we were able to fix future rental growth and satisfy the lender of the certainty of income growth, thereby securing higher gearing than would otherwise have been possible on their £169 million loan.
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