Glasgow Council secures £285 million funding from Legal & General for its equal pay settlement
27 Jun 2019
LGIM Real Assets (Legal & General) announces that it has committed, on behalf of its clients including Legal & General Retirement Institutional (LGRI), £285 million in funding to City Property Glasgow, a wholly owned subsidiary of Glasgow City Council (“GCC”). The funding is to support its recently settled equal pay liability. It is estimated that around 12,000 Glasgow city households will be positively affected by the settlement of the equal pay dispute.
Legal & General’s long-term financing is secured on an underlying property portfolio of 473 commercial assets located in and around Glasgow. The portfolio includes a range of Ground Rents, office assets and industrial estates, as well as strategic assets. These include two historic landmarks, the SEC Armadillo and City Halls, which have been retained by Glasgow City Council for the benefit of the community.
This investment provides an excellent match for Legal & General’s long term annuity and pension commitments, and marks another significant investment in Glasgow. In the last year, Legal & General has made a number of investments in the city. These include its 324 home Build to Rent scheme at Buchanan Wharf, the development of 160 room hotel opposite Queen Street Station, the acquisition of the Scottish court and tribunal building and the forward funding of the Atlantic Square Development to provide a major new UK Government hub. This long term financing demonstrates the positive impact that a proactive local authority and long-term debt investment can provide. Through the partnership, GCC has been able to deliver on its promise to resolve the equal pay dispute whilst also protecting its property assets, many of which have been in council ownership since the mid-1900s.
This transaction is testament to our ability to provide significant and complex financing to the public and private sector and our commitment to investments which have a positive social impact.
Legal & General is pleased to support Glasgow City Council in addressing their historic pay issues through the provision of the majority of the capital required to meet this liability.
Lorna Brown, Head of Real Estate Debt at LGIM Real Assets
This provision of funding demonstrates our commitment to investing in UK regions, and a partnership between a forward thinking institution and local authorities. We are pleased to support Glasgow City Council in delivering pay justice; it marks the start of a deeper partnership between Glasgow City Council and Legal & General; we view this as a basis for further investment to meet the city’s long term needs and aspirations.
Pete Gladwell, Head of Public Sector Partnerships at LGIM Real Assets
Settling Glasgow’s equal pay dispute and delivering pay justice for our women workers is a hugely significant step forward for the council and the city as a whole.
This deal not only means we can start to put right a historic wrong, but do so while safeguarding the future of the city’s property assets in public use. I’m very pleased to be doing that in partnership with Legal & General, which continues to show great confidence in Glasgow as a place to invest.
Council leader Susan Aitken