Legal & General Property (LGP) has acquired two office properties in the UK for a total £60.6 mln (€75.7 mln) from insurer Aviva on behalf of its UK Property Fund.
Legal & General Property (LGP) has acquired two office properties in the UK for a total £60.6 mln (€75.7 mln) from insurer Aviva on behalf of its UK Property Fund.
The firm bought 55 Strand in London WC2 for £37.4 mln, reflecting a yield of 4.34% in June 2015 following the expiry of a rent-free period. The recently refurbished property provides 2,300 m2 of multi-let office accommodation arranged over eight upper floors. A 530 m2 ground floor retail unit is let to Halifax.
LGP also acquired 5 Vanwall Business Park in Maidenhead for £23.3 mln, reflecting a net initial yield of 6.45%. The Grade A office building provides 5,000 m2 of space and is let in its entirety to global software firm SAP on a lease expiring in March 2021.
Matt Jarvis, manager of the UK fund, commented: ‘Offering a number of longer term asset management opportunities, these two acquisitions reflect the fund’s strategy to purchase schemes with the right property fundamentals that provide immediate and secure income from a diverse mix of tenants whilst also providing rental driven growth in the medium term.’
The two deals follow on from the purchase of 19/31 Piccadilly Gardens in Manchester last month for a total £23.1 mln, reflecting a net initial yield of 4.84%.
Legal & General’s £1.7 bn UK Property Fund converted into a Property Authorised Investment Fund (PAIF) structure in May this year, resulting in more tax-efficient income for many investors.
Launched in 2006 with initial equity of £100 mln, the fund has grown by over 55% in the last 12 months as it continues to see steady inflow of capital from both retail and institutional investors.