Legal & General (LGIM Real Assets) announces that it has exchanged contracts on a new Build to Rent (BTR) tower “North Tower” in Deansgate Square, Manchester. The acquisition, which is in line with LGIM Real Assets’ strategy to strengthen its exposure to alternative and operational sectors, has been made on behalf of its two largest balanced funds, the UK Property Fund and the Managed Fund, in a 50:50 ownership structure.
The deal represents the Managed Fund’s first BTR acquisition as part of a sustained push into alternative sectors. Previous investments include the purchase of hotels, healthcare facilities and student accommodation. The Managed Fund, launched in 1971, has grown by £2bn in the last six years to a current value of £3.4bn.
For the UK Property Fund, this acquisition represents a further strengthening of its exposure to operational assets, including the recent acquisition of a 189-flat BTR site in Chelmsford and 14,000 sq ft. of lettable self-storage space across three sites. Since its launch in 2006, the UK Property Fund has grown from £100m to around £3bn today, with its success underpinned by a blended and high quality portfolio of assets.
Designed by world renowned architects SimpsonHaugh, North Tower sits at the heart of the Deansgate Square development, a cluster of four elegant residential towers surrounded by carefully curated amenity, commercial and public realm spaces. North Tower provides 276 luxury apartments of one-, two- and three-bedrooms, across 37 storeys. Residents will benefit from exclusive access to an unrivalled amenity building which includes a two-storey gym, 20m swimming pool, sauna, steam room, fitness studios and a full size indoor sports hall.
The building was purchased from the developer, Renaker; one of the UK’s leading property developers with a proven track record in design, build and delivery. CBRE advised on the transaction.
Manchester is widely regarded as a ‘beta’ global city, being one of the most economically influential places in the UK outside of London. The city continues to see sustained investor interest, a result of both of its forecasted 14% population growth over the next 20 years – equating to an additional 76,000 people – and its diverse employment profile.
LGIM Real Assets has a strong track record in the BTR sector, which continues to form an integral part of its wider platform. Across the business, it now has 16 UK-wide sites in operation and development. North Tower represents Legal & General’s second BTR acquisition in Deansgate Square with the adjacent West Tower purchased by its BTR Fund in April 2019. West Tower is currently around 72% let, exceeding the leasing velocity expected for the acquisition.