Double development deal for Legal & General
Published: 22 June, 2010
Legal & General Property has acquired two retail/leisure schemes with development potential in Hounslow and Trowbridge for £43m
The Blenheim Centre in Hounslow was acquired for £35.5m, representing a net initial yield of 5.6 per cent. And the Castle Place Shopping Centre and St Stephen’s Place in Trowbridge were bought for £7.8m, yielding 10.8 per cent. Both deals reflect a new focus at L&G on development opportunities, following the appointment of Simon Russian in 2009.
On behalf of its Linked Pensions Fund, LGP has bought the freehold of the Blenheim Centre in Hounslow from a subsidiary of AREA Property Partners in an off-market transaction. The property is anchored by a 77,000-sq ft edge-of-town Asda superstore and includes long term development potential to partner the council on Phase II of the town centre’s redevelopment programme.
The total property comprises 129,512 sq ft of retail, leisure healthcare and restaurant accommodation over the ground and first floor, together with a 409-space car park in the basement. On the upper levels there are 484 apartments over 221,816 sq ft, all of which have been sold on a long lease, to a subsidiary of Barratt Homes.
And in Trowbridge, LGP has bought Castle Place Shopping Centre and St. Stephen’s Place development site on behalf of the UK Property Trust from GVA Grimley acting as receivers for Thiyan Investments.
Castle Place Shopping Centre, built during the 1970s, comprises a fully covered shopping and leisure centre, market hall and office space totalling 72,500 sq ft. Tenants include a mix of national multiple and local retailers, including Greggs, JD Wetherspoon and Martin the Newsagents, and it is anchored by a 27,500-sq ft Wilkinson store. Wiltshire Council occupies the leisure centre on the first floor and there is a multi-storey car park to the rear.
The St Stephen’s Place development site is situated immediately to the south of the centre. The three-acre brownfield development site, previously occupied by a Tesco foodstore, is cleared for future construction works.
Gordon Aitchison, LGP’s head of transactions, said: “In line with our acquisitions strategy, these two purchases reflect our ability to capitalise on our in-house expertise and selectively take advantage of market conditions and the rare opportunities that are now unfolding. These purchases demonstrate LGP’s ability to move fast in identifying and seizing attractively priced assets that are characterised by offering solid income streams coupled with opportunities for significant future value uplift.
Wilkinson Williams acted for LGP on the Hounslow purchase and Jackson Criss advised LGP on the Trowbridge acquisition.
