L&G secures Marston's portfolio for £35m
Legal & General Property (“LGP”) announces, on behalf of its LPI (Limited Price Inflation) Income Property Fund (the “Fund”), that it has increased its investment portfolio to over £800 million after completing two sale and leaseback purchases with Marston’s Plc (“Marston’s”), totalling £34.6 million.
Marston’s pub portfolio
In the larger of the two transactions, LGP completed a sale and leaseback purchase of a portfolio of seven Marston's pubs for £25.32 million, reflecting a net initial yield of 4.15%. The properties are all let to Marston’s on 40 year leases and have been purpose built for the pub/restaurant chain within the last three years. Situated across the UK, the pubs are located in the Midlands and North East, with one in the South West. The assets are all community or destination pubs, situated next to generators of high footfall, and are family-friendly and food-orientated in their offer, providing traditional fare at affordable prices in enduring locations. Savills advised LGP, while King Street Commercial advised Marston’s.
Marston’s HQ purchase
In a separate acquisition, LGP has completed the sale and leaseback purchase of Marston’s Headquarters, Marston’s House in Wolverhampton, for a total of £9.3 million, reflecting a net initial yield of 4.26%. The lease to Marston’s, who have occupied the building since the 1970’s, is for a term of 40 years. As part of the deal a substantial refurbishment programme of the property was undertaken to bring it up to grade A standard and provide an excellent HQ facility for Marston’s. Following completion of the works the property has a total gross internal area of 47,106 sq ft and benefits from 52 car parking spaces. Jackson Criss advised LGP, while King Street Commercial advised Marston’s.
Launched in 2010, following these two latest acquisitions the LPI Income Property Fund now has over £800 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 Legal & General Property, said: “Both of these acquisitions are in line with our investment strategy for the Fund, offering secure long term income streams which provide an annual hedge against inflation through the lease structures. Marston’s is a well-managed and highly experienced pub and brewery company and we are delighted to have completed our third Marston’s pub portfolio acquisition, positively increasing our leisure weighting in the Fund and diversifying the underlying real estate. We continue to see positive inflows of subscriptions into the Fund, as demonstrated by it breaking the £800 million mark.”
For further information, please contact:
PR Manager, LGIM Real Assets
Tel: 020 3124 2823
Head of Communications, Legal & General Capital / Real Assets (LGIM)
Tel: 020 3124 2777
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 £717bn in assets on behalf of over 3,100 clients (30 September 2015), providing products and solutions spanning all asset classes. LGIM Real Assets, headed up by Bill Hughes, has an aggregate asset value of £20.4bn (31 December 2015) 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 £17.8bn (31 December 2015). 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 14 debt investments to date across all key infrastructure sectors and has a total AUM of around £1bn.
CLL has now invested a total of over £1.7bn 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.