Sustainable Finance

Aviva Investors Provides Sustainability-Linked Refinancing to Property Group Romulus

Published on: 24 May 2022 08:25 AM

Aviva Investors, the global asset management division of Aviva plc, has issued a £227 million sustainability-linked refinancing to property group Romulus, a London-based investment and development firm that owns and manages a multi-million-square-foot mixed-use property. This is done on behalf of Aviva UK Life's Annuity Business.

Significantly, the deal means Aviva Investors' Real Estate Debt team has met its commitment to originate £1 billion in sustainable transition real estate debt by 2025 – one of five interim goals outlined in its Real Assets business's Net Zero Pathway – three years ahead of schedule and just 18 months after launch.

The ten-year fixed-rate loan is backed by Romulus' assets in the office, hotel, leisure, and retail sectors, which are spread throughout central London.

The loan's entire amount will be subject to sustainability-related KPIs, with more advantageous borrowing rates available if Romulus can demonstrate measurable environmental improvements in the assets being lent against.

Gregor Bamert, Head of Real Estate Debt at Aviva Investors, said: 

“We are delighted to build on our long-standing relationship with Romulus, a business which has shown great willingness to incorporate sustainability metrics across the full facility, against well-located assets and of high quality. Equally, it is great to have a long-standing borrower client help us reach our £1 billion origination target. When we created the Sustainable Transition Loans Framework, this figure seemed both challenging and substantial, however, the reaction and engagement from borrowers have been astounding and we look forward to setting ourselves some even more challenging targets in the next phase of the programme.”

Ben Richardson, Finance Director at Romulus, added: 

“We are very pleased to extend our relationship with Aviva Investors and to have agreed to a new, long-term facility, particularly one that recognises Romulus’s creative ability to continually add significant value to our investment portfolio and allows us to align our borrowing activities with the sustainability targets we have set for the business. We feel the facility also confirms the quality of Romulus’s assets, as well as our consistent and reliably strong performance as an active developer and asset manager.”

Marcus Mollan, Director of Annuity Asset Origination at Aviva UK Life, commented:

“Sustainable investing plays a critical role in our annuity business; the investments we make need to stand the test of time and be fit for purpose in a changing world. This is a fantastic achievement by our colleagues in the Real Estate Debt team at Aviva Investors and underlines their deep expertise. Aviva UK Life has now invested approximately £750 million of annuity policyholders’ money into sustainability-linked commercial mortgages. We are particularly pleased that some of these transactions are improving the sustainability characteristics of assets under existing loans, not just those being financed by new lending.”

Source: Aviva Investors