Legal & General's Build to Rent funds increased to £1 billion
Legal & General Investment Management Real Assets (LGIM Real Assets) has raised a further £170 million of equity investment from major institutions for an open-ended Build to Rent (BTR) fund. The new fund will open up the rental market to long-term pension and institutional investors, and sits alongside £600 million of investment by Legal & General Capital and PGGM in 2016.
LGIM Real Assets’ total investment capability for BTR now stands at circa £1 billion. Since the launch of the LGIM Real Assets BTR platform, it has secured over a 1000 homes under construction or in planning within Bristol, Salford and Walthamstow (picture above), and has a pipeline of future projects, including Birmingham, Leeds and London.
The BTR strategy will create a portfolio of high quality, long-term residential assets. It will deliver much needed purpose built rental accommodation for tenants, and rental income for pension funds to pay their pensioners. These new homes are required as result of a nationwide shortage across all tenures, as well as changing social and demographic trends, particularly the way people live and work in urban areas. Building rental housing will also create an important economic stimulus for UK urban regeneration areas, delivering new jobs and growth.
Mike Barrie, Director of Fund Management at LGIM Real Assets, said: “It is very pleasing to attract such significant institutional investment into our Build to Rent platform. We have a housing crisis in the UK, and only with institutional funding can we deliver the new homes the country needs. We have already secured a £1 billion in funding, delivering 1000 new homes either in planning or under construction, from a standing start in 2016. We are creating new jobs in the UK, and stimulating economic growth, and in 2017 we’ll also have our first new tenants moving into much needed new homes.”
In January 2016 LGIM Real Assets worked with Legal & General Capital, the Group’s principal investment arm, and PGGM, the Dutch Pension Fund, to build an initial 3,000 homes for rent across the UK. Legal & General Capital carefully deploys shareholder capital in early-stage investments, acting as a catalyst for further institutional investment. It can create new infrastructure assets in conjunction with LGIM Real Assets, or Legal & General Retirement, for the payment of customer pensions.
James Lidgate, Director of Housing at Legal & General Capital, added: “Legal & General is active in all parts of the housing market: build to rent, build to sell, student accommodation, modular construction, building new housing communities, and we’re also looking at purpose built retirement housing. There is a shortage in all types of housing tenure in the UK, and Legal & General Capital will deploy long-term investment capital with external partners, or with LGIM Real Assets to deliver modern, energy efficient, homes.”
LGIM Real Assets is looking to provide a new institutional class of specifically designed rental accommodation, which, based off fair value market rents, aims to deliver higher quality, customised space, together with a more professional and flexible standard of tenant service. Choosing to target well-located sites that benefit from good transport links and related infrastructure, LGIM Real Assets favours schemes where associated planning risk has been minimised but where there is still the opportunity to influence all aspects of design and construction from the start.
Led by Dan Batterton, BTR Fund Manager, in the past year LGIM Real Assets has made several key appointments and created a dedicated six-strong BTR team with combined expertise in land buying, financial modeling, development management and asset management.
For more information please contact:
Head of Communications,Legal & General Capital and LGIM Real Assets
t: 020 3124 2777
PR Manager, LGIM Real Assets
t: 020 3124 2823
Notes to editors:
LGIM Real Assets:
LGIM Real Assets is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £842bn in assets on behalf of over 3,200 clients (as at 30 December 2015), providing products and solutions spanning all asset classes. LGIM Real Assets, headed up by Bill Hughes, has AUM of £21.1bn (as at 30 June 2016) and is responsible for the division’s direct investment capabilities in property and infrastructure. LGIM Real Assets is made up of three specialist divisions, Legal & General Property (LGP), its property fund management arm, LGIM Infrastructure, its specialist infrastructure lending and investment division, and Commercial Lending Limited (CLL), its commercial lending arm.