Legal & General Property ("LGP") has acquired a portfolio of 11 freehold properties located in Covent Garden from ING Covent Garden Limited Partnership. The transaction was completed at a total consideration of £119.5 million (approx. 133.2 mln.), reflecting a net initial yield of 6.75% and an overall capital value of £563/ft².
The portfolio provides LGP with a total floor area of circa 210,000 ft² (19,440 m²), of which approximately 70% is office space and the remaining 30% is arranged as retail and restaurant premises. The properties are let to a diverse mix of 72 tenants, with average rents on the office accommodation equating to £35-£40/ft² and the restaurant and retail rents ranging between £125 and £220 per ft².
There are two distinct parts to the portfolio. The first is an investment package of eight multi-let office, retail and restaurant properties located on The Strand, Southampton Street and Bedford Street. The second is the Strand Island a site comprising three adjoining buildings totalling 102,300 ft² and let to 14 tenants.
Representing a unique investment solution for capturing value from larger volume trades, the portfolio has been purchased on behalf of and will be split between five of LGP's funds, including the Linked Life fund, Linked Pensions, Managed Fund, the Property Unit Trust and a segregated mandate.
Gordon Aitchison, Head of Transactions at LGP, comments: "This was a rare opportunity to acquire a prime portfolio of Central London assets on behalf of several of the funds. The properties offer a good mix of diverse income and active management opportunities where we can add value through refurbishment, lease engineering and change of planning uses. We faced stiff opposition to acquire the portfolio but were chosen for our ability to perform quickly. The fact that we managed to complete this complex purchase within seven days is a testament to the ability of the LGP platform."
LGP was represented by Cortex Partners and ING REIM was advised by Hanover Green and CBRE. Rugby Asset Management is Property Adviser to ING REIM.