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L&G JV takes on £400m Cardiff development

The 12-acre mixed-use city centre regeneration scheme is part of the UK insurer’s commitment to co-invest £1.5 billion of core capital outside of London.

Legal & General has teamed up with Cardiff-based property developer, Rightacres, to take on the £400 million (€553 million; $619 million) development of a regeneration scheme in the Welsh capital.

The 12-acre mixed-use Cardiff city centre regeneration scheme, known as Central Square, is located immediately to the north of Cardiff’s central train station.

Central Square is expected to comprise 1 million square feet of space in the heart of Cardiff city centre and the first phase of the project includes the development of two buildings – the proposed 150,000 square foot BBC Wales HQ and One Central Square, a 135,000 square foot office development that is part pre-let to national law firm, Blake Morgan, and is due for completion in January 2016. Further phases will include a mix of commercial and residential buildings.

“Cardiff has been hugely successful in establishing itself as a real player in the inward investment arena and Central Square represents the most exciting regeneration scheme due to come forward in Wales,” Laura Mason, director of direct investment at Legal & General Capital.

“Located in a prime city centre location, it is set to deliver major social and economic benefits, and proves the model for the public and private sectors working together in order to unlock real UK growth.”

The development forms part of L&G’s partnership with RIO – the UK government's Regeneration Investment Organisation – which acts as sponsor to help facilitate a deal pipeline, and work with central and local government on infrastructure projects.

The Cardiff regeneration is second deal to come from the partnership and follows last month’s announcement that L&G backed a £400 million regeneration scheme in East Leeds which it will develop in partnership with developers Scarborough Group.

The capital for the UK insurer’s RIO developments comes from a £1.5 billion vehicle L&G set-up back in January. The aim is to provide investment into UK regeneration projects including housing and infrastructure outside of London.

The fund has been set up as a co-investment vehicle, with L&G acting as both principal investor and manager. L&G will work alongside other investment partners and plans to secure further external funding, up to £15 billion.

Knight Frank acted for L&G on this development deal.