A tie-in between two Legal & General companies has secured a half-share in a 200-acre Yorkshire business development. The joint venture with Scarborough Group International will add more than a million square feet of mixed-use development to Thorpe Park in Leeds.
Legal & General Capital (LGC) and Legal & General Property (LGP) acquired the 50 per cent stake in the Yorkshire scheme to help finance phase two of Thorpe Park’s development. The new partnership claims the five-year expansion could generate as many as 13,000 jobs.
The deal is also the first project to be delivered since the start of L&G’s Regeneration Investment Organisation (RIO) partnership unveiled at 10 Downing Street in January.
Backed by a fund of international investors and expertise, L&G has pledged to co-invest £1.5bn into RIO pipeline projects. It is also working with the Government’s inward investment body, UK Trade & Investment, to attract an extra £15bn of capital into critical regeneration projects designed to boost national growth.
North Yorkshire-based Scarborough Group — which built and sold the first phase of the Thorpe Park scheme — will act as development manager for the 1.35m sq ft expansion. Earlier this year it was granted planning permission for the first 60,000 sq ft of offices and consent for 300 new homes on the site.
The latest project could potentially unlock the construction of 7,000 new homes in the East Leeds area through the construction of the first section of the East Leeds Orbital Road, a key piece of road infrastructure for the business park.
“We believe this scheme is a once-in-a-generation opportunity for East Leeds,” said Scarborough Group senior executive, Simon Marshall.
“In partnership with Legal & General and with the local council’s on-going support, we are confident that we can create a truly unique and forward thinking mixed-use community that will contribute hugely to the economic prosperity of the area, creating new jobs, homes and facilities for East Leeds.”
The RIO’s chairman is Sir Michael Bear. “The United Kingdom is known internationally as an attractive place in which to invest in large-scale regeneration and infrastructure projects,” he explained.
“For too long, however, investment has been focused on London and the South East. I am pleased that Legal & General has announced their first investment, under their partnership with UK Trade & Investment’s Regeneration Investment Organisation, alongside established developer Scarborough Group in Thorpe Park.”
Laura Mason, a director of direct investments at Legal & General Capital, described her company’s first RIO deal as outstanding. “This major development will help bring the ‘Northern Powerhouse’ to life, supporting the wider Leeds economy and acting as a major catalyst for further investment in the UK’s cities and regions,” she commented.
“Providing an excellent match for our long term money, our approach demonstrates that we can deliver strong financial returns for our shareholders and policyholders, while unlocking major infrastructure projects that support the economic growth prospects of the UK by closing the funding gap.”
Mason said: “L&G’s investment in Thorpe Park also highlights to international investors the attractiveness of working with local partners to access high-quality investment opportunities in other parts of the UK which they may not have previously explored.”
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