Legal & General Property has invested £14.5m (€20.4m) in a Birmingham asset for its open-ended Managed Property Fund.
The 43 Temple Row building, which includes office and retail, was sold by The Crown Estate.
The 36,000 sqft property, on the corner of Cherry Street, is next to a House of Fraser scheme bought by the same fund, which was launched in 1971 for UK pension schemes, late last year.
L&G recently invested £87.3m in a nearby office asset for its UK Property Fund. The No 1 Colmore Square building was bought at a net 4% initial yield for the fund, backed by institutional and retail investors.
Mark Russell, senior fund manager of the Managed Property Fund, said it is increasing its exposure to “business space assets with strong property fundamentals”.
He said: “We are optimistic about rental growth prospects for the right space in the major regional centres and particularly so where significant infrastructure investment is to be delivered.
“St Philips Square is considered a prime location within Birmingham’s central core and benefits from close proximity to good transport links.”
Hannah Milne, head of regional portfolio at The Crown Estate, said the sale of non-core assets in strong markets has provided new sources of capital for investment across our four core sectors.
“Outside of London, where our focus is on dominant regional retail and leisure schemes, we’re looking at how we can raise the quality of the assets we manage even further through refurbishments or new developments.”
The deal also follows L&G’s £69.5m purchase last month of the headquarters of UK beer brewer Mitchells & Butlers and an adjacent 120-bedroom Ibis Styles Hotel for the company’s LPI fund.