Mon, 09/12/2013 - 06:06
Legal & General Property’s UK Property Unit Trust (PUT) has reached over GBP1bn.
With net inflows of over GBP250m since the beginning of the year, the PUT, which was launched in 2006, has grown from GBP100m to over GBP1bn since inception.
Equating to 35 per cent growth per year on average, it is one of the few property funds in the sector that continues to see steady inflow of capital from both retail and institutional investors.
The fund has outperformed the Lipper Property IMA Sector peers over one, three, and five years, with 2.1 per cent per annum outperformance over the five years to October 2013.
Investing its money in a range of retail, office and industrial market opportunities across the UK, that provide the potential for long-term capital growth, the fund also invests in alternative sectors such as car showrooms and hotels, whilst retaining liquidity by utilising further investment capabilities such as REITs and derivative trades. So far this year The PUT has secured 23 acquisitions, totalling GBP183m, and is in discussions on a number of other potential purchases.
Recent acquisitions include:
- Hams Hall 170 and Hams Hall 28, Coleshill, Birmingham. Comprising two industrial distribution warehouse units, the properties were acquired for GBP16.6m, representing a net initial yield of 6.9 per cent. Constructed in 2007, the warehouses are located in one of the UK’s premier distribution parks, Hams Hall Distribution Park, which is situated 12 miles from Birmingham and 15 miles from Coventry, and benefits from excellent transport links including its own onsite intermodal rail freight terminal.
- The Premier Portfolio. Purchased for a total consideration of GBP26.1m, the portfolio consists of six assets located in Wales, Midlands and North West, including one industrial and office campus, four distribution units and one retail warehouse park. The deal reflected an overall net initial yield of 10.6 per cent.
- Redcliffe Quay, Bristol. A prominent office development located adjacent to the Waterfront and Bristol Bridge, the property comprises 108,049 sq ft arranged as two separate buildings linked under a public piazza by a common lower ground floor car park and was acquired for GBP19.7m.
- Dunfermline, Fife Leisure Park. Acquired for GBP26m, reflecting a net initial yield of 6.5 per cent, this scheme comprises a top performing Odeon cinema, a Bowlplex bowling alley, seven restaurants and a flagship Bannatynes gym.
Other acquisitions in 2013 included the Ptarmigan portfolio, the Pendragon portfolio and Alphington Retail Park in Exeter. It has also delivered successful development projects, such as St Stephen’s Place Leisure Park in Trowbridge and Burghmuir Retail Park in Stirling.
Benchmarked against the Lipper Property IMA and IPD Balanced Monthly Index funds, the fund’s investment objective is to achieve income and capital growth through diversified investment in UK commercial property, with a focus on property selection and active management within a research-driven risk/return framework for portfolio construction.
Matt Jarvis, fund manager of the PUT at Legal & General Property, says: “It is a significant milestone for us to achieve and we are incredibly pleased with the way the fund has grown and how it has performed since we launched in 2006. With the market now catching increased interest from retail investors generally we expect the growth of the fund to continue and for our investment appetite to be sustained into 2014.”
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