Press releases

Legal & General Property reduces void on Covent Garden Estate portfolio to 1.7%.

Part of Covent Garden Estate - Corner of The Strand and Bedford Street
Part of Covent Garden Estate
Corner of The Strand and Bedford Street

05 August 2011

Michael Barrie - Director of Balanced Funds - Legal & General Property
Michael Barrie
Director of Balanced Funds
Legal & General Property

Legal & General Property ("LGP") today announces an update on its £142 million Covent Garden Estate portfolio, 18 months after acquisition from ING Covent Garden Limited Partnership and following a period of significant asset management to capitalise on the enduring appeal of the area.

Since its purchase in December 2009, the mixed-use 210,000 sq ft Covent Garden Estate, comprising 11 assets and 72 tenants, has undergone a programme of significant asset management to capitalise on growth opportunities. This has resulted in letting transactions totalling over £600,000 per annum, including all inherited voids let or under offer (with the exception of two small suites), resulting in the void rate reducing on lettable space to 1.7% excluding Centric House and Agar Street. This is a notable achievement against the backdrop of an ongoing challenging economic environment and given that circa 6% of the portfolio was previously not income producing.

On the office element of the portfolio alone, a total of five lettings have been secured since the start of 2011, producing an additional income of circa £350,000 per annum. Recent lettings include the first floor of 1 Heathcock Court, comprising 2,596 sq ft, which was secured to Lieberman Research on a five-year lease at a rent of £36.50 per sq ft or £94,754 per annum.

Part of Covent Garden Estate - Agar Street
Part of Covent Garden Estate
Agar Street

To capitalise on this ongoing demand, LGP has been undertaking a number of major office refurbishment projects, including Centric House and 6 Agar Street:

  • The comprehensive refurbishment of Centric House very recently reached practical completion, providing five floors of refurbished office space, spanning 5,535 sq ft, with a quoting rent of £42.50 per sq ft
  • Following the appointment of Morgan Sindall, works have started onsite at 6 Agar Street, a £65 million, 55,000 sq ft office development, which will be delivered to the market in September 2012, when supply of new, Grade A, West End space is predicted to be particularly constrained.
Part of Covent Garden Estate - Corner of The Strand and Bedford Street
Part of Covent Garden Estate
Corner of The Strand and Bedford Street

Including these projects the entire office element of the Estate has shown a 20% improvement in capital value to June 2011. Capital values across the rest of the portfolio have also remained strong, particularly among assets with the potential for conversion to residential. At present, LGP is exploring conversion prospects at five assets.

Commenting on the achievements, Michael Barrie, Director of Balanced Funds at Legal and General Property, said:"We are extremely pleased with the progress that has been made over the last 18 months across the Covent Garden Estate portfolio and feel very confident that these key milestones clearly demonstrate LGP’s ability to add value through active asset management, an approach that has already enabled us to significantly increase lettings activity across the portfolio.

"Approaching the anniversary of their appointment, our partnership with Jones Lang LaSalle (King Sturge), Asset Managers for the portfolio, continues to develop and their contribution has assisted in identifying some excellent opportunities which we expect to deliver positive results over the short to medium term."

Part of Covent Garden Estate
Part of Covent Garden Estate

EA Shaw and Hanover Green act as joint letting agents on the office element of the portfolio, while EA Shaw and Knight Frank advise on the redevelopment of 6 Agar Street. Nash Bond acts on behalf of LGP on the retail element of the portfolio.

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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), one of Europe's largest institutional asset managers and a major global investor. LGIM manages approximately &ppound362bn of assets on behalf of more than 3,300 clients (30 June 2011) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 17 separate funds or vehicles and two segregated mandates with an aggregate asset value of over &ppound10.1bn as at 31 March 2011. 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

Balanced Funds
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust; UK Property Income Fund; LPI Income Property Fund and the Hybrid 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, leveraging upon the significant resources provided by the wider LGIM platform. 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 its high profile Covent Garden scheme, Agar Street, as well as significant town-centre retail regeneration projects, including Bracknell, Northampton and Eastbourne.

Legal & General Property Limited. Registered address: One Coleman