L&G lands mega UK portfolio

In buying 55 properties in a transaction valued at £550m, Legal & General Property has completed one of the biggest portfolio investments in the UK since the global financial crisis.

Legal & General Property, the real estate investment management arm of UK insurer Legal & General (L&G) , has purchased one of the largest property portfolios in the UK since the global financial crisis.

The platform, part of L&G’s investment management business, Legal & General Investment Management (L&GIM), has acquired from property company Telereal Trillium a portfolio of 55 properties in a transaction valued at £550 million (€668.5 million; $919 million), according to an announcement by L&GIM.

L&G Property completed the transaction on behalf of two other L&G units, namely Legal & General Capital, the company’s financial risk management business which manages the principal investing activities of its annuity, protection and savings businesses, and L&G Retirement which provides annuities to more than one million L&G customers.

The assets, backed by or let to Royal Bank of Scotland, are situated across the UK and there’s one asset in Ireland also. They comprise 41 retail or banking properties, 10 offices and four industrial sites. Three of the assets, however, will be sold on to their tenant, UKI Insurance.

The assets are subject to index-linked rent reviews and have an average unexpired lease term of 22 years. The majority of the income from the assets comes from London or the South East of the UK.

L&G Property said the deal brings its direct property transactions to more than £3.15 billion in the last 12 months. That figure includes £2.6 billion of investment and £650 million of sales, making it one of the more active investment houses in the UK commercial property market.

Gordon Aitchison, director of investment and development at L&G Property, said: “This portfolio comprises well located, high quality assets, heavily-weighted towards London, including a number of trophy assets. Backed by an A-rated tenant on long-term index-linked leases, the bond like quality and duration of the income is exceptionally attractive as a match for L&G’s long dated liabilities.”