Legal & General Property secures third acquisition for its recently launched LPI Income Property Fund.
01 February 2011
Legal & General Property (“LGP”) announces the acquisition of a Tesco supermarket in Newton-le-Willows, Merseyside on behalf of its LPI (Limited Price Inflation) Income Property Fund (the “Fund”). The deal marks the Fund’s third acquisition, following the purchase of two Welsh government-let assets, and brings its total investment to over £40 million, having already secured over £100 million of commitments to the Fund in its first six months.
The Fund, which was launched earlier this year, offers Defined Benefit pension schemes an innovative way to invest in property with secure, primarily government-backed, inflation-linked sources of income. The portfolio generates income yields well in excess of those from comparable asset classes such as index-linked gilts or social housing.
The Tesco supermarket was purchased from Liverpool Victoria for £13.7 million, bringing the portfolio’s income yield to just under 5% per annum. Let to Tesco on an unexpired lease term of 24 years, with annual RPI-linked uplifts at a minimum of 2% per annum, the property comprises 33,967 sq ft of retail and ancillary accommodation along with 172 parking spaces. Located on the eastern boundary of Merseyside, the store benefits from a strong catchment area and excellent transport links. The deal follows the acquisition of two recently completed office buildings let to the Welsh Government on 25-year leases, located in Newport and Swansea, benefitting from annual RPI-linked uplifts with no upper limit.
The Fund continues to take advantage of the sale-and-leaseback assets currently being offered to LGP through its unique and extensive access to on and off-market opportunities, leveraging its in-house property expertise and close relationships with banks and public sector bodies.
Derek Gilby, Senior Fund Manager at Legal & General Property, comments:
“The acquisition at Newton-le-Willows represents an excellent opportunity for us to expand and diversify the existing portfolio within the LPI Income Fund. The transaction is in line with the Fund’s strategy of acquiring long-let assets which provide secure, inflation-linked income streams that reflect significantly lower volatility than would be expected from a typical property fund.”
Pete Gladwell, Business Development Manager at Legal & General Property, comments: “The strong appetite for and investment progress of the LPI Income Property Fund is a great result for LGP, being our third successful fund launch in 2010. As a second-generation long lease fund, which has been designed around clients’ requirements, we believe that the strong demand that we have witnessed has been down to its compelling offer. Indeed, we understand it is the only fund in its peer group able to provide income streams over 20 years in length that provide annual LPI inflation, backed by purely investment grade tenants.
“Our pension fund clients have found this to be an ideal match for their future cashflow requirements. Additionally, we are pleased that the Fund has been buy-rated by four of the major investment consultancies, representing a major vote of confidence in both the Fund’s strategy and the capability of the broader L&G Investment Management platform upon which it relies.”
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Notes to editors
Legal & General Property:
Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM) and one of the largest institutional property fund managers in the UK. LGIM had funds under management of over £320bn as at 30 June 2010, whilst LGP manages or co-manages 15 separate funds or vehicles and a segregated mandate, with an aggregate asset value of over £9.3bn as at 30 June 2010. These funds include:
Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; UK Logistics Fund; Arlington Business Parks Partnership; and the English Cities Fund
Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership; Performance Retail Limited Partnership and Warrington Retail Limited Partnership
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust, UK Property Income Fund; and LPI Income Property Fund.
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance across the sector. Owing to its size, diversity and penetration, it benefits from best in class banking and property industry contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities. Taking a client-centric approach, the business places the highest priority upon integrity and transparency. Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability.
LGP’s sector specialism’s cross all facets of the real estate market. In particular, the Company has a major development platform, responsible for delivering the West End office market’s latest landmark, Central Saint Giles, and currently involved in developing two further high profile London schemes, Walbrook Square and Agar Street, as well as significant town-centre retail regeneration projects, including Bracknell, Northampton and Eastbourne.
For more information please contact:
PR Manager Investments
t: +44 (0) 2031 242096
About Legal & General
Legal & General Investment Management Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091894.
t: +44(0) 20 3124 2096
About Legal & General
Legal & General Property Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.