LGIM Real Assets sell £112m property
LGIM Real Assets (Legal & General) has sold 15 Bonhill Street, London to Mayfair Capital Partners for £112.5m.
This reflects an net initial yield of 5.12% and allows its UK Property Fund to continue to diversify its holdings by recycling its capital into more operational and alternative assets.
Matt Jarvis, senior fund manager of the UK Property Fund at Legal & General, said: “Having acquired the asset in 2014 for £62.6m, this sale marks the conclusion of a highly successful asset management programme and supports our fund strategy to seek undervalued sectors.
“The fund has had a strong focus on investing in operational real estate such as hotels and self-storage where we can benefit from income linked to the underlying operational performance of the property for our occupiers.”
Giles King, fund manager at Mayfair Capital Investment Management, added: “The Bonhill Building meets a number of our thematic investing criteria – tech connectivity, transport infrastructure, clustering of tech businesses and wellness.
“Along with an attractive yield of 5%, we see potential for further growth in the office rents.
“The acquisition case was strengthened by our expectation London will remain a popular destination for talent and occupiers regardless of the Brexit outcome.
“Much of the global city’s attraction is tied to factors independent of the UK’s EU membership – location, time zone, language, workforce, infrastructure and culture.
“So far, London has proved very resilient, with strong job creation and new commitments from international corporates.”
Following the UK Property Fund’s launch in 2006, the fund has grown from £100m to over £3bn today as it continues to see steady capital investment from retail investors.
Colliers acted for Legal & General on this deal and Knight Frank acted for Mayfair Capital Partners.