L&G's Paif secures London industrial investment for £51.85m, as it continues to invest in UK growth opportunities
24 Apr 2017
Legal & General (L&G) announces, on behalf of its UK Property Fund (the “Fund”), that it has acquired a prime Greater London industrial estate and office investment for £51.85m, reflecting a net initial yield of 6.15%.
The Headquarters facility for JVCKENWOOD UK Ltd, the UK arm of a multinational electronics company that was formed as a result of the 2008 merger of JVC and Kenwood Corporation, the asset is a well-let industrial and office investment. It is situated in a core Greater London location on the M1 North Circular intersection at Staples Corner, NW2 7BA. Extending to 250,910 sq ft and arranged over 9.26 acres, the facilities on site include a modern distribution warehouse, together with a high-specification office building and two further warehouses. With two leases expiring in 2025 and the third in 2020, the site is fully let and generates a yearly rent of £3,395,873.
The deal follows hot on the heels of the Fund’s acquisition of the Alexis portfolio for £86.3m from Fairholme Estates – a portfolio of seven retail properties located across the UK. Tenants include Waitrose, Sainsbury’s and Debenhams and the portfolio generates a total yearly rent £5,023,229.
Launched in 2006, the The Legal & General UK Property Fund has grown from £110m to over £2.5bn today as it continues to see steady inflow of capital from both Retail and Institutional investors. The Fund converted into a PAIF structure in May 2014, resulting in more tax-efficient income for many investors.
Matt Jarvis, Senior Fund Manager of the Legal & General UK Property Fund, commented: “One of the most prominent sites on the North Circular, this investment represents a well-let, dynamic property in a sector that we believe continues to offer strong growth prospects. The price offers up front yield reward as well as the opportunity to add further value.
“In line with our fund strategy and based on our UK property market forecasts, the UK Property Fund continues to recycle its capital out of secondary assets and into stronger performing opportunities where we see prospects to drive value. Following these recent acquisitions, the Fund is making strong inroads in its reinvestment strategy, securing assets that are well positioned to provide value and long term income.”
Cushman & Wakefield advised the vendors on the deal and Colliers advised Legal & General.
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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 £902bn in assets on behalf of over 3,200 clients (as at 31 December 2016), providing products and solutions spanning all asset classes. LGIM Real Assets, headed up by Bill Hughes, has AUM of £23.2bn (as at 31 December 2016), actively investing and managing assets across commercial property, private residential, infrastructure and property lending and, most recently, corporate credit