Press releases

L&G purchases Piccadilly Gardens Travelodge for £23m.

24 October 2014

Legal & General Property (LGP) announces that it has successfully acquired 19/31 Piccadilly Gardens in Manchester for the total consideration of £23,100,000 from Jolan Piccadilly Limited. This equates to a net initial yield of 4.84%.

Occupying a very prominent position overlooking Piccadilly Gardens, at its junction with Oldham Street, the 87,376 sq ft property was comprehensively redeveloped earlier this year. It comprises two restaurant units, let to Zizzi and Nando's, and a Morrison's food-store arranged over ground and basement floors, together with a 157-bed Travelodge hotel on the five upper floors.

With an average unexpired lease term of approximately 21.5 years to expiry and approximately 19.5 years to breaks, the property is held freehold. It is let to WMMorrison Convenience Stores Ltd until 12 January 2029, Nandos Chickenland Ltd and Gondola Restaurants Ltd (Zizzi) until 12 January 2034 and Travelodge Hotels Ltd until 12 January 2039. The total current passing rent is £1,183,650 per annum, 78% of which is subject to RPI linked rent reviews.

The asset was purchased on behalf of the Legal & General UK Property Fund. One of the fastest growing funds in its sector, launched in 2006 the Fund has grown from £100 million to over £1.5 billion since inception and continues to see steady inflow of capital from both Retail and Institutional investors. Delivering strong returns, the Fund has outperformed the Lipper Property IMA Sector peers over one, three, and five years.

Matt Jarvis, Fund Manager of the Legal & General UK Property Fund, comments: "Piccadilly Gardens is a key location within Manchester’s Central Business District and forms a natural continuation of the prime retailing area along Market Street. As such, it has continued to establish itself as a new vibrant leisure pitch within the city centre with a number of leading restaurant operators keen to establish a presence in the area.

"Displaying strong fundamentals, an excellent income profile and a couple of asset management opportunities,
our purchase of 19-31 Piccadilly Gardens is considered to be a medium-long term hold for the Fund. Complementing the Fund's other holdings in the area, which include Royal Buildings, opposite, and Manchester's Malmaison hotel, a few doors down, we believe that demand for good quality modern units in prime locations will always be present and that these assets will continue to benefit from wider regeneration of Manchester's City centre.”

Tony O’Brien, UK Development Director for Travelodge Hotels, said: "This is one of the very best hotel locations in Manchester and the Travelodge has been trading extremely well since it opened at the end of January."

The purchase follows closely behind Legal & General Property's acquisition of nearby multi-let office building, One Piccadilly Gardens, on behalf of its Managed Property Fund for £75 million, reflecting a net initial yield of 5.64%. 

Christopher Dee acted for Legal & General and JLL advised the vendor.

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 £465bn in assets on behalf of over 3,100 clients (30 June 2014) and provides products and solutions spanning all asset classes. LGP is the fourth largest institutional property fund manager in the UK, managing or co-managing 17 separate funds or vehicles including three segregated mandates with an aggregate asset value of £14.2bn as at 30 June 2014. These funds include:
  • Balanced Funds
    Life Fund; Linked Pensions; Linked Life; Managed Fund; Legal & General UK Property Fund; UK Property Income Fund I; UK Property Income Fund II; LPI Income Property Fund and the Hybrid Property Fund
  • 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.
  • LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance. Owing to its size, diversity and penetration, it benefits from best-in-class banking and property 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 the significant resources provided by the wider LGIM platform. Protecting the medium to long term value of its portfolio, as a leader in sustainability, green principles are embedded into every property and investment decision.
  • Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability. In particular, the Company has a major development platform, responsible for delivering community-focused projects ranging from West End landmark buildings to significant town-centre retail and leisure regeneration schemes.
  • Forming part of the Group’s larger UK housing and infrastructure investment strategy, LGP also continues to participate in a growing range of supply side housing activities, including financing affordable homes, the house building sector, urban regeneration, student accommodation and care homes.

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.