L&G secures Winchester student block for £31m
Legal & General Investment Management Real Assets (“L&G”) announces, on behalf of its LPI (Limited Price Inflation) Income Property Fund (the “Fund”), that it has increased its investment portfolio to more than £870 million after completing the acquisition of the 399-bed Queens Road Student Village in Winchester from a private investor.
The property is let to the University of Winchester for 40 years at a rent of £1.3M per annum and was secured for approximately £31M. The lease incorporates annual rental increases linked to RPI.
The Queens Road Student Village is located within the University of Winchester Campus in Winchester City Centre. The campus is situated on the west side of the City Centre within a ten minute walk of Winchester station and the central shopping area. The purpose built property was constructed in 2010 and offers 399 student bedrooms (375 en-suite cluster rooms, 23 twin flats and one accessible room) arranged over seven self-contained buildings.
Launched in 2010, following this latest acquisition, the LPI Income Property Fund now has £870 million of assets under management. Offering Defined Benefit pension schemes an innovative way to invest in direct property with secure, primarily government backed, inflation-linked sources of income, the portfolio generates income yields well in excess of those from comparable asset classes such as index-linked gilts or social housing.
Derek Gilby, Senior Fund Manager at L&G, said: “The purchase of Queens Road Student Village in Winchester is in line with our investment strategy for the Fund, offering a secure long term income stream from an investment grade University. We are currently in a low interest rate environment and with annual rental uplifts linked to inflation we can ensure stable and resilient returns over the long term.”
Professor Neil Marriot, Deputy Vice-Chancellor at the University of Winchester, said: “The University of Winchester is pleased to partner L&G to be able to offer our students with affordable, high-quality, on-campus accommodation on a long term sustainable basis.”
Hanover Green and Savills advised L&G and Doherty Baines acted for the vendor.
For more information please contact:
Faye Walters, PR Manager, LGIM Real Assets
Tel: 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.
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 £17.7bn (30 June 2016). 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.
LGIM Infrastructure has concluded 18 debt investments to date across all key infrastructure sectors and has a total AUM of around £1.6bn.
CLL has now invested a total of over £1.8bn across 19 deals. Transactions include eight loans to the social housing sector, two loans to the student accommodation sector, two hotel debt deals and two loans to the care home market.