Legal & General secures data centres in sale and leaseback deal with Financial Institution.
19 October 2012
Legal & General Property (“LGP”) announces, on behalf of its LPI (Limited Price Inflation) Income Property Fund (the “Fund”), that it has completed the acquisition of two Glasgow data centres, in a sale and leaseback transaction from an established UK financial institution. The properties were acquired for circa £22.5 million.
The data centres are both located in Glasgow and are let on completion to the UK financial institution for a term of 30 years and 20 years, respectively. In both instances the rent is subject to annual RPI linked uplifts with a floor and cap of 2% and 5%, respectively. In accordance with the Fund’s mandate, the tenant is only entitled to assign the lease to a company or government body that, like itself, has a Standard & Poor’s credit rating of A or Moody’s equivalent.
The first property comprises a 49,757 sq ft facility set over a single storey within a three acre site. Completed in 2008, it contains three data halls, workshop areas, storage and office accommodation. The second property comprises 27,147 sq ft and was developed over a 20 year period.
The Fund, which was launched in 2010, offers Defined Benefit pension schemes an innovative way to invest in 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.
The Fund continues to take advantage of the sale and leaseback assets currently being offered to LGP
through its unique and extensive access to on and off-market opportunities, leveraging its in-house property expertise and close relationships with banks and public sector bodies.
Derek Gilby, Senior Fund Manager at Legal & General Property, comments:
“The acquisition of these two data centres provides the fund with diversification, both in terms of sector and geography, whilst increasing the tenant mix with a strong financial covenant. Additionally, the transaction is in line with the Fund’s strategy of acquiring long-let assets which provide secure, inflation-linked income streams that reflect significantly lower volatility than would be expected from a typical property fund.”
Stuart Spalding from DTZ advised Legal & General Property on the deal, while David Davidson from Cushman & Wakefield acted for the tenant.
Notes to editorsLegal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £381bn of assets on behalf of more than 3,300 clients (30 June 2012) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 16 separate funds or vehicles and two segregated mandates with an aggregate asset value of £10.4bn as at 30 June 2012.
These funds include:
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; Performance Retail Limited Partnership and Warrington Retail Limited Partnership
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust; UK Property Income Fund; LPI Income Property Fund and the Hybrid Property Fund.
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance across the sector. Owing to its size, diversity and penetration, it benefits from best in class banking and property industry 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 upon the significant resources provided by the wider LGIM platform. Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability.
LGP’s sector specialisms cross all facets of the real estate market. In particular, the Company has a major development platform, responsible for delivering the West End office market’s latest landmark, Central Saint Giles, and currently involved in developing its high profile Covent Garden scheme, Agar Street, as well as significant town-centre retail and leisure regeneration projects, including Bracknell, Trowbridge, Northampton and Eastbourne.
For more information please contact:
PR Manager, Legal & General Capital and Real Assets, LGIM (Property, infrastructure and alternative finance)
t: + 44 (0) 203 124 2777
m: + 44 (0) 7718 395 279
About Legal & General
Legal & General Property Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.