L&G secures Doncaster distribution warehouse let to Next
Legal & General Property ("LGP") announces, on behalf of its LPI (Limited Price Inflation) Income Property Fund (the "Fund" / "LPI Fund"), that it has completed the acquisition of a new distribution warehouse let to Next on a 25 year lease. The property was acquired for £68,450,000, representing a net initial yield of 4.42%.
Located adjacent to Next’s two existing units at West Moor Park, Doncaster, the property consists of a purpose built storage and distribution warehouse that will extend to 702,500 sq ft (GIA) and will be linked via a two storey bridge to Next’s existing facility. Due for completion in early 2016, the unit will be delivered by Highbridge Properties over a period of 14 months with works already having started on site. The rent is subject to annual RPI linked uplifts.
One of the largest commercial centres in South Yorkshire, Doncaster is fast becoming one of the most important distribution locations within the UK. As such, the town benefits from good road, rail and airport links, as well as a large labour supply.
The scheme includes a wide range of environmental designs, including rainwater harvesting, PV cells on the roof, enhanced BMS and M&E installations and air heat exchangers providing heating/cooling for the offices and warehouse.
Launched in 2010, the LPI Fund offers Defined Benefit pension schemes an innovative way to invest in property with secure, primarily government backed, inflation-linked sources of income. With £600 million of assets under management, 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: "This will be Next’s third unit at West Moor Park, comprising the principal hub for its furniture range. Highbridge has an excellent reputation for providing high specification distribution warehousing and we regard Next as being best in class in a highly competitive UK fashion retail market; both attributes make this an outstanding investment opportunity for the Fund.
"In addition, this will offer the LPI Fund with diversification into the distribution sector whilst providing annual inflation hedging for a significant length of time."
JLL advised Legal & General Property on the deal, while CBRE acted for Next and Highbridge Properties.
NOTES TO EDITORS
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 £465bn in assets on behalf of over 3,100 clients (30 June 2014), 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 £15.5bn (31 Dec 2014). These include:
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.
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
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Registered in England 2091897.