Legal & General has announced its first investment in the UK private rental housing sector and plans to become a major owner of rented accommodation, the company said on Thursday.
Legal & General has announced its first investment in the UK private rental housing sector and plans to become a major owner of rented accommodation, the company said on Thursday.
L&G said it will seek to invest up to £1 bn (€1.4 bn) in the Private Rental Sector (PRS), which is seen as 'an ideal new institutional asset class for long-term investors'.
The move allows the group to achieve a 'better match to long-term annuity liabilities than existing fixed-income assets, enhance returns, and provide real economic growth for the UK', it noted.
Legal & General Capital (LGC), the group's investment division, has acquired an initial £25 mln regeneration site at Walthamstow in London to build and rent over 300 flats.
'We view investments over 30 or more years and are using our long-term capital to change the way the UK housing market is financed. This will be the first of many PRS deals for LGC,' commented Laura Mason, director of Investments at Legal & General Capital.
She added: 'PRS fits our investment objectives extremely well. We are creating new assets for Legal & General that generate a long-term inflation linked income which is a natural fit for our balance sheet.'
The Walthamstow PRS development will be built and managed by Legal & General Property, on behalf of LGC.
