LGIM Real Assets (Legal & General) has acquired five student accommodation blocks and an academic facility at Exeter University in UK, for £76 mln (€86 mln).
LGIM Real Assets bought the assets on behalf of two separate funds.
The student accommodation blocks have been acquired by Legal & General’s UK Property Fund for £49.6 mln, 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.
Legal & General’s LPI (Limited Price Inflation) Income Property Fund has bought the Into Academic Facility at Exeter University for £26.4 mln. The property lease is guaranteed by the University of Exeter and is for a term of 30 years.
'The quality of accommodation and teaching facilities represents a large factor for students when deciding where they want to go to University,' said Matt Jarvis, fund manager of the Legal & General UK Property Fund. '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.'
Launched in 2006, the UK Property Fund has grown from £100 mln to over £2.9 bn today as it continues to see steady inflow of capital from both Retail and Institutional investors.
The LPI Income Property Fund, launched in 2010, offers defined Benefit pension schemes a 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.
