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Lloyds agrees first 'green' development loan with BlackRock

By Paul Norman - Wednesday, December 06, 2017 15:00

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Funds managed by BlackRock Real Estate have secured a £39.9m financing package from Lloyds Bank Commercial Real Estate in what the bank has described as it first "green" development loan as part of its pioneering Green Lending Initiative, CoStar News can reveal.

The loan is for a 272 bed student block in Hoxton, east London, that BlackRock is in the process of developing.

The three-and-a-half-year deal is the first ground-up development funding to come from the bank’s Green Lending Initiative, which has now arranged more than £850m of lending to support firms that are prioritising sustainability.

BlackRock will benefit from a 20bps margin discount on its loan – covering both development and investment phases by guaranteeing specific ‘Green Covenants’ including a BREEAM Excellent rating, a strong GRESB score and the installation of numerous energy efficiency creating technologies.

Once occupied, BlackRock has committed to procuring all of the building’s energy from renewable sources, running educational initiatives on environmental impact to student residents and providing incentives to students to drive better energy usage behaviours.

The site – 11-13 Long Street – is due to complete in 2019.

James Halstead, vice-president at BlackRock Real Estate, said: “The bespoke covenants we created alongside Lloyds Bank are a recognition of our efforts to be at the vanguard of green development, and forms a partnership that will continue to support the building long after the first students have moved in.”

Selina Dicker, director, Lloyds Bank Commercial Real Estate, added: “BlackRock is a global leader in sustainability and so our Green Lending Initiative provides an ideal platform to support its new development activity.

“This is a pioneering deal that not only enshrines sustainability into the fabric of the building but also blends technology with on-going occupier interaction to optimise its performance while in use. It sets a benchmark for green development and the way it can be financed.”

The Lloyds Bank green lending initiative is a £1bn commitment, launched in 2016, to incentivise and support corporate clients’ efforts to reduce CO2 emissions from their real estate assets. The initiative is part of Lloyds Bank’s Responsible Business agenda and its purpose to help Britain prosper by supporting British businesses and their individual sustainability initiatives.

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