Legal & General Property (LGP) has continued its Birmingham acquisitions campaign by paying The Crown Estate £14.5m for 43 Temple Row. The property arm of the finance group has already spent around £260m on assets in the city in little over a year.
The 36,000 sq ft mixed office and retail block — next door to the House of Fraser scheme which LGP’s managed property fund bought last year — stands at the corner of Cherry Street and Temple Row overlooking the city centre’s St Philips Square.
So far this year LGP’s Birmingham purchases have included:
In the spring of 2014 LGP’s UK Property Income Fund II paid £87.5m for Priory Court and Temple Court, Old Square, in the heart of the city business district.
“The acquisition of 43 Temple Row supports our current fund strategy to increase our exposure to business space assets with strong property fundamentals,” commented Mark Russell, a senior fund manager within the £2.5bn property fund.
“We are optimistic about rental growth prospects for the right space in the major regional centres and particularly so where significant infrastructure investment is to be delivered.
“St Philips Square is considered a prime location within Birmingham’s central core and benefits from close proximity to good transport links, including Snow Hill Station, New Street Station and Moor Street Station, as well as the new Midland Metro due for completion late this year,” he added. “We also expect it to gain from improvements that we are looking to deliver to the wider block, working closely with House of Fraser.”
Unable to borrow or raise funds from traditional sources, The Crown Estate finances the majority of its investments by selling off its non-core assets. “Sales of assets into strong markets have been key to driving our commercial performance over recent years and helping to provide new sources of capital for investment across our four core sectors,” explained the organisation’s Regional Portfolio head, Hannah Milne.
“Outside of London, where our focus is on dominant regional retail and leisure schemes, we’re looking at how we can raise the quality of the assets we manage even further through refurbishments or new developments.”
Knight Frank acted for Legal & General and Griffiths Eccles advised The Crown Estate.
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