Canada Life provides UCLan with £30m loan
The deal will provide the university with cash to deliver its strategic plan, while the investor will accrue rent from three student blocks in Preston city centre for the next 40 years.
Under the terms of the 40-year finance lease, Canada Life Asset Management will earn rent from Ribble Hall, Roeburn Hall and Whitendale Hall. Yearly rent will start at £854,000 with annual rental uplifts of between 1% and 5%.
The properties comprise 184 flats and are capable of accommodating around 1,000 students.
In turn, the University of Central Lancashire will invest the £30m from the deal to deliver on its strategic plan. This includes increasing the number of clinical facilities for medical science courses and improving several university buildings, including student accommodation.
On the expiry of the finance lease, the property will revert to the university.
Michael White, head of UK property at Canada Life Asset Management, said: “We are delighted to be supporting the University of Central Lancashire with a significant loan facility of £30m to help in the delivery of its strategic plan.
“This 40-year financing arrangement reflects Canada Life Asset Management’s ongoing appetite to provide substantial, long-term facilities to high-quality sponsors that offer attractive income cash flows in support of our bulk annuity business.”
Graham Baldwin, vice-chancellor of the University of Central Lancashire, said: “We welcome this new relationship with Canada Life Asset Management to provide £30m of funding that will be used as part of our future capital expenditure on key initiatives to support our strategic goal of providing an improved student and colleague experience.”