LGP acquires Marston's HQ and seven pubs for €44m

Legal & General Property (LGP) has acquired the headquarters of UK pub chain Marston’s and seven of its pubs in two sale-and-leaseback transactions worth a total of £34.6 mln (€44.2 mln).

The pubs were acquired for £25.3 mln at a net initial yield of 4.15%. The assets are located in various locations in the north-east, midlands and south-west of the UK. The properties are let on 40-year leases and have all been purpose-built within the last three years.

Marston’s House in Wolverhampton was bought for £9.3 mln, reflecting a net initial yield of 4.26%, and is also leased on a 40-year term. A substantial refurbishment programme has been undertaken at the property to take it up to grade A standard.

Both acquisitions were for the LPI Income Property Fund, which was launched in 2010 and now has over £800 mln of assets under management. The fund offers defined benefit pension schemes a way to invest in direct property with secure, inflation-linked income sources.

Derek Gilby, senior fund manager LGP, said: ‘Both of these acquisitions are in line with our investment strategy for the fund, offering secure long-term income streams which provide an annual hedge against inflation through the lease structures.’