The sites in Atlanta, Georgia and Providence, Rhode Island will deliver over 300,000 sq. ft. of lab, science and technology space, acting as a major catalyst for innovation growth.
27 Oct 2022
As part of its business plan to internationalise, Legal & General Capital (LGC) has secured its first US science and technology projects through its newly formed joint venture, Ancora L&G.
Earlier this year, LGC formed Ancora L&G with US based real estate developer, Ancora, to create a real estate platform dedicated to driving science and technology growth across the US. Through an initial seed capital investment of $500 million from LGC, Ancora L&G will be capitalised to deliver $4 billion of existing US pipeline and planned acquisition and development activity over the next five years. Legal & General Group currently manages over $1.8 trillion of assets globally and is increasing its presence in the US for both equity and debt vehicles. The new venture builds on the successful track record of Ancora’s team and the investing record of LGC in the UK, including over $5 billion currently committed to science and technology development projects at Oxford and Manchester universities.
Marking the first acquisition for the new partnership, Ancora L&G has, acquired 387 Technology Circle NW, a 128,000 sq ft Class A life science/lab building in the Science Square Innovation District adjacent to Georgia Institute of Technology’s (GeorgiaTech) campus in Atlanta, Georgia. The project meets its ambition to invest in and build a premium portfolio of science and technology assets in emerging US markets, in partnership with high quality anchor institutions. Atlanta is a top 25 US life science cluster market with strong forecast growth over the next 10 years. Georgia Tech’s capabilities in research and commercialisation; the emerging life sciences/tech industry in Atlanta; and its economic dynamism, make for strong demand indicators at site. The asset is currently fully let and occupied by four tenants: Georgia Tech, CardioMEMS, Kemira Chemicals, and VERO Biotech. The opportunity to acquire the asset was secured through a competitive process run by Eastdil Secured.
The US is the world’s largest real estate market at c.$9 trillion in value. However, the lab real estate market in particular comprises only 166 million sq ft - one of the smallest sectors among other commercial asset classes. This lack of scale creates high barriers to entry for investors and it has been particularly challenging for tenants to grow due to scarcity of supply. Legal & General’s ability to access this opportunity via Ancora sets it apart from other sources of institutional capital seeking to participate in the market.
LGC has a strong track record of establishing and scaling up innovative businesses and has led the way in driving science and technology growth through its Bruntwood SciTech partnership, the UK’s leading developer of innovation districts. Bruntwood SciTech has quickly expanded over 11 UK locations, a model LGC will look to replicate across the US in partnership with Ancora.
In line with this ambition, Ancora L&G has recently been selected as the preferred developer of a public health laboratory in Providence. An 80,000 sq ft state-of-the-art laboratory, funded by the U.S. Centers for Disease Control, will anchor the project and Brown University has also signed a letter of intent to lease 20,000 sq ft of private laboratory space.
To support future growth of Ancora L&G, LGC is seeking third party co-investment partners to grow the business at scale. As with a number of LGC investments, LGC aims to finance longer term cashflows by using them to back its annuity business, providing better value for policyholders and greater financing for investors.
Wes Erlam, Managing Director of Urban Regeneration, Legal & General Capital: “As LGC drives forward its ambition to internationalise, it is a testament to the business’s investment appetite and the quality of our teams that we have secured our first projects just months after forming the new Ancora L&G joint venture. The development in Georgia is an exemplar of the types of projects we will look to invest in, located in areas of significant growth potential with high quality anchor institutions as key stakeholders in each project. They build significant momentum for future growth of the Ancora L&G partnership, while laying the groundwork for LGC’s wider US expansion.”
Josh Parker, CEO Ancora Legal & General: “These new projects are a significant start to our partnership with Legal & General. With the addition of new lab space and our backing by established anchor institutions, we are pleased that our partnership is already delivering real results for both our US clients and UK investors. With the appetite for more investment and building of new sites, we look forward to a positive momentum as we move forward with our growth plans.”
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023
Legal & General Capital (LGC) is Legal & General Group’s alternative asset platform, creating assets for Legal & General Retirement and third-party clients in order to achieve improved risk-adjusted returns for our shareholders. LGC has built its capabilities in a range of alternative sectors, including in residential property; specialist commercial real estate; clean energy; alternative credit; and venture capital, which are all supported by long-term structural growth drivers, meet a financing gap and respond to a scarcity of supply that is underpinned by enduring societal needs.
Its purpose is to invest society’s capital for society’s benefit. Investing in the real economy and supporting the Group’s focus on climate and inclusive capitalism, LGC’s investments create jobs, change lives and contribute towards a net zero carbon future.
Legal & General has invested over £29bn in levelling-up regional economies, including through major UK-wide regeneration schemes and has recently made a commitment to enable all its new homes to operate at net zero carbon emissions from 2030.
*at 31 Jun 2021