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.
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 £1.29 trillion1 ($1.57tn) in
assets, 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 billion2 ($43.8bn) 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
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.
1LGIM internal data as at 30 June 2022. These figures include assets managed by LGIMA, an SEC Registered Investment Advisor. Data includes derivative positions.
2Source: LGIM Real Assets. AUM data as at 30 June 2022.
*at 13 Jan 2023
For professional clients only. Past performance is not a guide to the future. 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. Views expressed are of LGIM as at 12 January 2023. The Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272.
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