LGIM Real Assets winds up second fund buying with Stafford retail park

By Paul Norman - Tuesday, January 09, 2018 9:41

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LGIM Real Assets, on behalf of its second UK Property Income Fund, has exchanged to buy Riverside Retail Park in Stafford from LXB Retail Properties for £36.8m, reflecting a net initial yield of 6.8%. This acquisition marks the final acquisition for UK PIF II.

As part of a linked transaction, the Legal & General Leisure Fund has entered a forward commitment to buy the adjacent leisure development known as Waterfront for £15m, which will be anchored by Odeon cinemas.

The retail and leisure scheme was developed in 2016 and provides a total of 102,060 sq ft of retail accommodation across 17 shops.

The anchor tenants are M&S and Primark, with a strong supporting tenant line-up including River Island, H&M, Outfit and JD Sports. There are four vacant units, two of which are under offer. The scheme has a 1,025 space multi-storey car park located in the waterfront and an additional 180 spaces underneath Riverside; both car parks are operated by the local authority. Waterfront will include six restaurants and a six screen Odeon cinema. Nandos and Frankie & Benny’s are already trading.

Following UK PIF I, LGIM Real Assets launched its second fund within The UK Property Income Fund model series.

The fund has a seven year life span and delivers a core/core-plus risk strategy and includes investment from Legal & General Group and the fund team with a total buying power or Gross Asset Value (GAV) of £610m when including gearing.

Following the acquisition, UK PIF II has acquired a balanced portfolio of 13 properties to date, totalling approximately £525m. Located in strong growth locations across the UK, these include Priory Court and the Lewis Building in Birmingham; The Overgate Centre in Dundee; The Grafton in Cambridge and FC200, West London. The Fund continues to successfully implement its business strategy for each of the properties, adding value and driving income growth across the portfolio through clever asset management initiatives.

Charlie Walker, Director of LGIM Real Assets and Fund Manager of UK PIF II, said: “This acquisition for UK PIF II is an excellent final addition for the Fund, allowing us to secure a high-quality new shopping destination in Stafford with an attractive income profile. We are looking forward to working with the retailers and continue to further enhance Riverside’s footfall, following recent new openings.”


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