L&G adds £159m in assets for recently closed second UK property income fund
Legal & General Property (“LGP”) announces that it has acquired two further assets for its second UK Property Income Fund (“UK PIF II” / the “Fund”) with the successful purchase of The Grafton Centre in Cambridge for £99m and First Central 200 (“FC200”) in West London for £59.8m taking total Fund AUM to £372m.
Grafton Centre, Cambridge
Acquired from M&G Real Estate, the purchase price reflects a net initial yield of 5.18%. The Grafton Centre comprises nearly 500,000 sq ft of retail and leisure space arranged over 84 units, while also providing 1,150 car parking spaces. It is anchored by Debenhams and Bhs, and other major retailers include H&M, Next, New Look, Topshop and Boots. The first floor comprises an eight-screen Vue cinema as well as a food court, with tenants including Bella Italia, Burger King and Café Lavazza.
With one of the strongest and fastest growing economies in the UK, Cambridge is considered an attractive investment target with its core strengths being its large, affluent and rapidly expanding catchment based on the University, significant R&D industry and tourism.
FC200, West London
Situated in an increasingly sought after area of West London, the Grade A office building was acquired from Wainbridge. Constructed in 2009, the office accommodation is arranged over seven floors and comprises 167,435 sq ft. The ground to third floor is let to Bechtel Limited, a market leading engineering and construction company, until 2024. The remainder of the building totals 72,665 sq ft.
Believed to represent the largest volume of capital raised by a diversified UK closed-ended property fund in over 12 months, when it closed in April this year, the Fund secured over £403m in equity, giving it a total buying power or Gross Asset Value (GAV) of £610m when including gearing.
Together with the Grafton Centre and FC200, the fund has acquired four properties to date, totalling circa £372m, which include Priory Court and Temple Court in Birmingham and The Overgate Centre in Dundee and has a strong pipeline of assets.
Charlie Walker, Director and Fund Manager of UK PIF II, said: “Both purchases complement the existing assets in the portfolio and come hot on the heels of the final closing of our second closed-ended UK Property Income Fund, which provides over £610 million of firepower. Going forward, we continue to seek out opportunities to deploy capital into attractive UK acquisitions where we see good quality income potential.”
Strutt & Parker and Bidwells advised LGP on the Grafton Centre transaction, while Cushman & Wakefield acted for M&G Real Estate. Knight Frank represented LGP on FC200, while CBRE advised Wainbridge.
For further information, please contact:
PR Manager, Real Assets, LGIM
020 3124 2777
Legal & General Property:
Legal & General Property (LGP) forms part of the Real Assets division of Legal & General Investment Management (LGIM), which is responsible for the company’s direct investment capabilities in property and infrastructure. One of Europe’s largest institutional asset managers and a major global investor, LGIM manages £525bn in assets on behalf of over 3,100 clients (31 March 2015), providing products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 19 funds or vehicles with an aggregate asset value of £16.9bn (30 June 2015). These 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 asset 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.