LGP buys 55-asset RBS portfolio from Telereal Trillium

Legal & General Property (LGP) has completed the acquisition of a portfolio of 55 real estate assets backed by the Royal Bank of Scotland.

The total investment volume for the transaction with vendor Telereal Trillium is £550 mln (€665 mln). It was carried out as a combined investment by L&G Capital and L&G Retirement, part of the UK-based pensions and insurance group's strategy to increase principal funds allocated to direct investments.

The transaction lifts LGP's direct property transactions to over £3.15 bn in the past year alone, acquiring £2.6 bn and disposing of £650 mln.

The portfolio comprises 41 retail/banking units, 10 office buildings and four industrial sites. As part of the transaction, three of the assets which are occupied by UKI Insurance will be sold to the tenant. One of the assets is located in Dublin.

Prominent London buildings include the headquarters of private bank and wealth manager Coutts at 440 Strand; 63-65 Piccadilly and 97 New Bond Street.

Gordon Aitchison, director of investment and development at LGP, said: 'This is one of the largest acquisitions to be successfully undertaken by a UK fund in recent years. The portfolio comprises well located, high quality assets, heavily weighted towards London, including a number of trophy assets. Backed by an A-rated tenant on long term index-linked leases, the bond like quality and duration of the income is exceptionally attractive as a match for L&G's long dated liabilities.'

The RBS leases are subject to annual index linked rent reviews and have an average weighted unexpired lease term of 22 years. Around 45% of the income is derived from the London assets with a further 22% coming from those located elsewhere in the South of England.

CBRE and law firm Ashurst acted fro Telereal Trillium, while DTZ and law firm Slaughter and may advised LGP.