LGIM Real Assets' €1.5 bn Limited Price Inflation Income Property Fund has agreed to fund the development of a new student accommodation block pre-let to an unnamed Scottish University.
Lincam Pentland, a subsidiary of Edinburgh-based housebuilder S1 Developments, has completed the sale of the proposed 315-room student residence, formerly known as Pentland House, on a forward-funding basis for a purchase price of around £35 mln (€40 mln).
The property will be leased on a new 20-year full repairing and insuring lease on completion of the development, which is scheduled for September 2020.
Derek Gilby, senior fund manager of the LPI Income Property Fund, commented: 'This is an excellent buy for the fund, offering a secure long-term income stream which provides a hedge to inflation from a top investment grade University.'
Dan Teague of S1, commented: 'We will be providing exceptional accommodation for the University in time for the 2020/21 academic year.'
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.
