LGIM Real Assets (Legal & General) announces that it has acquired five student accommodation blocks and a high-quality Academic Facility at Exeter University for a total consideration of £76m.
21 Dec 2017
The UK boasts many of the best universities in the world and has one of the world's strongest higher education systems. Attracting international students and academic talent, the higher education sector remains vital to the long-term prosperity of the UK economy. In order to support this strong demand from students, modern purpose-built accommodation and teaching facilities which complement each other are an essential part of a first class education experience.
LGIM Real Assets has bought these assets on behalf of two separate Funds as part of a joined up approach to satisfy its wide ranging investor needs across its fund management platform.
The student accommodation blocks have been acquired by Legal & General’s UK Property Fund for £49.6m, representing an initial yield of 5.78%. Let to INTO University of Exeter on a 35 year lease, the student accommodation totals 517 rooms comprising a combination of 160 studio rooms, 355 en-suite cluster rooms and two staff rooms across five blocks. The accommodation is just a short walk from the main University campus, to the North of the main University buildings.
INTO Academic Facility
Legal & General’s LPI (Limited Price Inflation) Income Property Fund has bought the INTO Academic Facility at Exeter University for £26.4m. The property lease is guaranteed by the University of Exeter and is for a term of 30 years. The 36,000 sq ft teaching facility is located right at the heart of the Exeter University Campus and is a modern, bespoke, high-specification building.
Derek Gilby, Senior Fund Manager of the LPI Income Property Fund, commented: “The ability for LGIM Real assets to purchase these two elements in different funds was key to delivering the deal. It also demonstrates the breadth of our fund management platform which has enabled us to collaborate to satisfy our differing customer needs. This is an excellent buy for the fund, offering a secure long term income stream from a top investment grade University as well as satisfying our objective of continuing to secure public sector tenants for the Fund.”
Launched in 2006, the UK Property Fund has grown from £100m to over £2.9bn today as it continues to see steady inflow of capital from both Retail and Institutional investors.
Launched in 2010, the LPI Income Property Fund offers defined Benefit pension schemes an innovative way to invest in direct property with secure, primarily government backed, inflation-linked sources of income, generating income yields well in excess of those from comparable asset classes such as index-linked gilts or social housing debt.
CBRE advised Legal & General on the transactions.
Matt Jarvis, Fund Manager of the Legal & General UK Property Fund: The quality of accommodation and teaching facilities represents a large factor for students when deciding where they want to go to University. We believe that quality facilities help to provide a quality education and we will continue to target universities like Exeter which have modern purpose built living and teaching accommodation. This acquisition is in line with our strategy for the UK property Fund to target income producing assets on longer leases as well as our ambition to increase our exposure to alternatives.
Notes to editors
Legal & General Investment Management Real Assets (LGIMRA) is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £1.28tn in assets (as at 31 December 2020), working with a range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
LGIM Real Assets has assets under management of £36.3bn (as at 31 December 2020) and is one of the largest private markets investment managers in the UK. Investing in both debt and equity and across the risk/return spectrum, LGIM Real Assets actively invests in and manages assets across commercial, operational and residential property sectors, as well as infrastructure, real estate, corporate and alternative debt.
Taking a long term view in order to future proof our investments, LGIM Real Assets continues to lead the industry in ESG performance, considering all environmental, social and governance issues at asset level as well as portfolio level. In 2021, we are implementing a strategy as part of our commitment to net zero carbon emissions across the real estate equity business by 2050, and have also committed to measuring social value across 20% of our platform by the end of the year.
(As of June 2021)
The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Past performance is no guarantee of future results. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these 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. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2021