Press releases

LGP Launches Second UK Property Income Fund with a target size of up to £1bn.

14 March 2013

Legal & General Property (“LGP” / the “Company”) today announces that it has begun initial marketing of the second UK Property Income (“UKPIF II” / the “Fund”), following the successful full investment of UKPIF I, its innovatively structured, income focussed, UK fund.

With a first close expected by the end of Q2 this year, UKPIF II is targeting a GAV of up to £1 billion. A closed-ended English Limited Partnership, the Fund will feature off-shore feeder vehicles. It will retain the proven fund structure of UKPIF I, which offers investors to choose their preferred level of gearing of between 0% and 50% Loan to Value (LTV), providing a unique solution to wide ranging leverage appetites amongst an international investors.

The Fund’s investment strategy will be opportunity led, targeting assets across the UK and within sectors that the fund manager sees as offering the most compelling return prospects. Target acquisitions will be centred upon large lot size assets, underpinned by strong income streams. The Fund will be supported by a circa 90 strong UK dedicated real estate team, using a superior depth of expertise to enhance returns through active management opportunities. As with UKPIF I, it therefore aims to capitalise on the economic recovery in the UK based on a core/core-plus risk strategy over a seven year lifespan.

Charlie Walker, Director of Business Development and Fund Manager of the UK Property Income Fund, comments: “Capitalising on the success of the enduring strategy implemented in UKPIF I, this second fund looks to take advantage of the exciting opportunities that we believe exist in the UK market for buyers with significant capital to deploy, as a result of regulation, banks deleveraging and closed-ended fund expiries.

“We continue to see an illiquidity discount on larger lot sized properties outside prime. Additionally, the weight of overseas capital has driven up the prices for low risk assets and, as a consequence, the positive yield premium offered by properties requiring asset management expertise is at an unprecedented level.”

Reaching final close at the end of 2011, UKPIF I secured a total of £300 million of equity from 14 major international institutional investors based in the Middle East, Denmark, UK, France, Finland, Switzerland and Japan. With assets under management currently totalling £430 million, following the acquisition of the FIX Portfolio for £115.9 million at the start of this year, UKPIF I is fully invested. Other properties within the portfolio include 1 City Place in Gatwick, The Meadows Shopping Centre in Chelmsford, Fremlin Walk Shopping Centre in Maidstone, Guildford Business Park and the Co-op distribution centre in Andover. 

Cushman & Wakefield will be supporting the marketing activities around this fund.

Notes to editors

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 £406bn of assets on behalf of more than 3,300 clients (31 December 2012) 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 16 separate funds or vehicles and two segregated mandates with an aggregate asset value of £10.4bn as at 31 December 2012.

These funds include:

Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment 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 specialisms 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 and leisure regeneration projects, including Bracknell, Trowbridge, Northampton and Eastbourne.

For more information please contact:

Olivia Goodall
PR Manager, Legal & General Capital and Real Assets, LGIM (Property, infrastructure and alternative finance)

t: + 44 (0) 203 124 2777
m: + 44 (0) 7718 395 279

About Legal & General

Legal & General Property Limited.

Registered address:
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.