LGP completes circa GBP1.7bn commercial real estate transactions in 2011

By Bridging Loan Directory -

Legal & General Property completed GBP1.7 billion of direct property transactions in 2011, acquiring approximately GBP970 million, representing 19 assets, and disposed of circa GBP710 million, representing 18 assets. LGP continues to be one of the most active investors in the UK commercial property market according to Property Funds World.

Deals ranged in size from circa GBP3 million to over GBP300 million, the largest being the acquisition of the Rolls Building on Fetter Lane from Delancey for a total consideration of GBP305 million. They also included the company’s debut investment into the student accommodation sector, with the purchase of a 45-year income strip in Imperial College’s new 566-bed Battersea development, Griffon Studios, which it acquired for circa GBP116 million, as well as the new Academy for English Football in Burton upon Trent, which is due to complete in June in time for the Olympics.

In December alone, LGP completed over GBP655 million of transactions, the last of which was completed on the 23rd and comprised the acquisition of 1 City Place in Gatwick from RREEF for GBP39 million. The asset was subsequently let to Nestle. It also disposed of Brighton Retail Park in East Sussex to a client of Scottish Widows Investment Partnership for GBP17.75 million, following a major letting secured to M&S and the completion of a number of green initiatives. As reflected by a number of other major transactions completed throughout the year, this sale demonstrated LGP’s strong active asset management platform and ability to successfully recycle capital within its portfolio in order to reinvest in new stock and upcoming market opportunities whilst realising profits.

Over the course of 2011, LGP raised a total of GBP1.4 billion of new equity which included capital secured from a number of new sources, including major international institutional investors based in the Middle East, Asia and Scandinavia.

In order to continue to invest capital in the market wisely and prudently, LGP has significantly grown its transactional and development capabilities over the last few years through a number of strategic hires, including that of Adam Kerr, who joined in November as Head of Transactions, in order to enhance its access to off-market deals and extend its project pipeline. Headed by Gordon Aitchison, who was recently promoted to Director of Investment and Development, these two strengths have now been brought closer together under one house, in order to identify a whole new range of opportunities where the unrivalled market reach, knowledge and expertise of LGP’s wider platform can better support each fund’s strategic goals.

Gordon Aitchison, Director of Investment and Development, says: “With considerable fire power at our disposal, we feel that we are well placed to continue to capitalise on opportunities in the UK market as they unfold in 2012. With strong expectations of forced deleveraging, failed refinances and banks required to raise capital, we believe that this year will not only present some attractive investments but that there will also continue to be more interesting opportunities where we can use the depth and breadth of our platform to unlock potential.”