Legal & General Property raises Â£100m of additional equity for its recently launched UK Property Income Fund.
11 April 2011
Legal & General Property (“LGP”) announces that it has secured a further £100 million of equity for its UK Property Income Fund (the “Fund”). The new equity has come from an internationally diverse group of major global institutional investors based in France, Finland, Switzerland and Japan. The further investment will bring the Fund’s NAV to more than £250 million and GAV to above £400 million.
The Fund seeks to generate returns of 15% geared and 10% ungeared through careful stock selection, focused on acquiring larger lot size assets which offer opportunities to add value during the life of the fund. The Fund aims to deliver two thirds of the target return through quarterly income distribution.
The Fund has a bespoke and highly innovative debt structure which enables both geared and ungeared subscriptions, providing investors with the flexibility to select their optimal level of leverage. Debt has been provided by Eurohypo.
New commitments have been evenly split between those with gearing and those without, endorsing the Fund’s structure as being attractive to a much wider group of investors than a fund running a single debt strategy.
Having already invested £213 million in the market, the Fund’s acquisitions include Fremlin Walk Shopping Centre in Maidstone, Guildford Business Park and a distribution centre at Andover (pre-let to Co-op). The Fund will continue to purchase well-located office, retail and industrial properties across the UK, which demonstrate strong and stable income streams and that offer selective active asset management opportunities over the medium term.
Cushman & Wakefield Corporate Finance acted as placement agent.
Charlie Walker, Fund Manager of the UK Property Income Fund, comments:
“As one of only a handful of property funds successfully launched last year, this additional equity injection further reflects the high levels of investor appetite for this innovative product.
“Designed to enable investors to access the high returns on offer from investing in larger lot sizes, at an attractive entry point in the cycle, the Fund has already secured investment from a considerable number of UK and Global pension schemes. In order to satisfy this ongoing appetite, the Fund has now extended its window of investment to September 2011.”
Bill Hughes, MD of Legal & General Property, added:
"Raising equity for real estate funds remains challenging. We are aware of many funds in the UK and beyond that have failed to achieve a close, and others that have not grown since modest first closes. We are delighted with the progress on capital raising for our fund and plan to bring a number of active conversations to a head in the next few months, prior to a final close in September.
“Recent investor commitments are a further endorsement of the quality of the team and the Fund's assets, as well as the flexible gearing structure and strong alignment of interest between investors and the management team. The high distribution yield being paid on the Fund has also attracted a number of investors."
- Ends -
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 £353bn as at 31 December 2010, whilst LGP manages or co-manages 16 separate funds or vehicles and 2 segregated mandates, with an aggregate asset value of over £9.8bn as at 31 December 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 Property Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.
About Legal & General
Legal & General Investment Management Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091894.
t: +44(0) 20 3124 2096