Legal & General Property, the property investment management arm of UK insurer Legal & General, has launched a joint venture partnership with Dutch pension manager PGGM. The initial allocation to the joint venture will be approximately £375 million (€502 million; $570 million).
The joint venture has been set up to source Central London office investments which the pair expect to provide growth prospects due to neighbouring infrastructure and regeneration projects, as well as asset management opportunities. The partners will also look to integrate environmental, social and governance (ESG) features throughout the joint venture’s assets.
L&G will lead the acquisitions process and act as the fund manager for the joint venture. The joint venture will be looking for assets ranging between £30 million and £90 million in value and which require significant improvement and where they can be part of a wider regeneration story.
The pair already completed its first investment for the venture, the £67 million acquisition of 72 Broadwick Street in Soho. 72 Broadwick Street has a net internal area of 65,316 sq ft, including 54,097 sq ft of office space and 11,219 sq ft residential accommodation, arranged over part basement, part ground and six upper floors. The offices are let to The National Magazine Company Limited for a term of 15 years, expiring in September 2018. Walbrook Land and Savills acted for Legal & General on the acquisition and JLL acted for the vendor.
“The UK is a great place to invest, pension funds and sovereign wealth funds want to invest here in infrastructure, direct investments and property,” said Laura Mason, director of direct investments at Legal & General Capital, in a statement, adding that joint ventures are an excellent way of achieving this.
The joint venture is not the first time the two have teamed-up. Earlier this month Legal & General and PGGM partnered to acquire the Bishopsgate Long Term Property Fund Unit Trust for around £370 million. Held in a joint venture as well, the Trust comprises a portfolio of 24 commercial properties located across the UK and arranged over 1,543,217 sq ft.