Press releases

LGP Acquires £87m Office Asset in Birmingham as Second Purchase for UK PIF II.

25 April 2014

Legal & General Property (“LGP”) announces that it has exchanged contracts to acquire Priory Court and Temple Court, Old Square, Bull Street, Birmingham for a total consideration of £87,500,000.  Purchased on behalf of its second UK Property Income Fund (“UK PIF II” / the “Fund”), the property was acquired from receivers and the price reflects a net initial yield of 8.28%.

Located in the heart of Birmingham’s Central Business District (“CBD”), the property comprises two linked, high profile office buildings totalling 230,143 sq ft of office accommodation, a retail parade of nine units totalling 6,194 sq ft and a pub extending to 11,000 sq ft.  Representing the second acquisition made by UK PIF II, the asset is multi-let to 13 tenants at a total passing rent of £7,660,916 per annum.  With an overall average weighted unexpired lease term in excess 11 years, Priory Court is majority-let to the UK Government until 2034, whilst Temple Court is predominately let to PWC until December 2014.

Launched in November 2013, LGP’s UK PIF II has already secured over £218m from investors based in the UK, Nordics and Middle East, giving it a total investment capacity or Gross Asset Value (GAV) of £372m when including gearing.  With a strong pipeline of investor interest and a further close expected before the end of June, the Fund is targeting a GAV of £750m, through a series of closings, and is capped at a GAV of £1bn.  As with the first fund, UK PIF II’s innovative gearing structure allows investors to choose their preferred level of gearing of between 0% and 50% Loan to Value (LTV).

Charlie Walker, Director of Business Development and Fund Manager of the UK PIF I and UK PIF II, comments:  “As the second acquisition made by UK PIF II, this transaction supports the Fund’s focused strategy of seeking well-located, larger lot size assets with strong income dynamics.  These are prominent buildings in Birmingham’s CBD and provide the Fund with an ideal combination of a strong and secure income return together with scope to deliver added value through compelling near term active management”.

CBRE advised LGP.

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 £443bn in assets on behalf of more than 3,100 clients (30 September 2013) 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 £11.6bn as at 30 September 2013. 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 West End landmark building, Central Saint Giles, and Agar Street, its high profile Covent Garden office scheme, amongst others, and is currently involved in bringing forward a number of significant town-centre retail and leisure regeneration projects, including Bracknell, Trowbridge, Northampton and Eastbourne.

Legal & General Property Limited. Registered address: One Coleman Street, London EC2R 5AA. Registered in England 2091897.

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.