Legal and General Property has acquired ING Covent Garden Limited Partnership's entire investment portfolio for £119.5 mln (EUR 134 mln), reflecting a net initial yield of 6.75%.

Legal and General Property has acquired ING Covent Garden Limited Partnership's entire investment portfolio for £119.5 mln (EUR 134 mln), reflecting a net initial yield of 6.75%.

CGLP retains its mixed-use retail, office and residential development at St Martins Lane and New Row, which is expected to be completed shortly.

The 11-building portfolio provides LGP with a total floor area of circa 210,000 sq ft (19,200 m2), of which approximately 70% is office space and the remaining 30% is arranged as retail and restaurant premises. The properties are let to a diverse mix of 72 tenants, with average rents on the office accommodation equating to £35-£40 per sq ft and the restaurant and retail rents ranging between £125 and £220 per sq ft.

There are two distinct parts to the portfolio. The first is an investment package of eight multi-let office, retail and restaurant properties located on The Strand, Southampton Street and Bedford Street. The second is the Strand Island - a site comprising three adjoining buildings totalling 102,300 sq ft and let to 14 tenants.

The portfolio has been purchased on behalf of and will be split between five of LGP’s funds, including the Linked Life fund, Linked Pensions, Managed Fund, the Property Unit Trust and a segregated mandate.

Gordon Aitchison, Head of Transactions at LGP, commented: 'This was a rare opportunity to acquire a prime portfolio of Central London assets on behalf of several of the funds. The properties offer a good mix of diverse income and active management opportunities where we can add value through refurbishment, lease engineering and change of planning uses.

'We faced stiff opposition to acquire the portfolio but were chosen for our ability to perform quickly. The fact that we managed to complete this complex purchase within seven days is a testament to the ability of the LGP platform.'

LGP was represented by Cortex Partners and ING REIM was advised by Hanover Green and CBRE. Rugby Asset Management is property adviser to ING REIM.

The sale was initially announced by Rugby Estates, which holds a 6.5% interest in CGLP. Rugby Estates said sales of the St Martins Lane development are expected to take place over the next 18 months. When completed, CGLP will be wound up. The Group has been adviser to and an investor in CGLP since it was established in 2002 as an investment fund with a planned seven-year term.