Legal & General buys build-to-rent tower in Manchester

Legal & General buys build-to-rent tower in Manchester
Deansgate Square, Manchester Photo:Courtesy of Renaker

Legal & General (LGIM Real Assets) has exchanged contracts to acquire a new build-to-rent (BTR) tower “North Tower” in Deansgate Square, Manchester on behalf of its two largest balanced funds, the UK Property Fund and the Managed Fund, in a 50:50 ownership structure.

The building was purchased from the developer Renaker. Price was not disclosed. CBRE advised on the transaction.

”The acquisition is in line with LGIM Real Assets’ strategy to strengthen its exposure to alternative and operational sectors,” said in a statement.

The deal represents the Managed Fund’s first build-to-rent (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.

READ ALSO :Legal & General to fund UCA student accommodation scheme

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.

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.

” to rent(BTR) will continue to be a preferred subsector, giving us real-time access to occupational markets with a robust growth in rental income..

“This acquisition represents the coming together of two of LGIM Real Assets’ largest funds as we continue to diversify our exposure to alternative sectors. Alongside hotels, self-storage and student accommodation, build-to-rent (BTR) will continue to be a preferred subsector, giving us real-time access to occupational markets with a robust growth in rental income,” said Michael Barrie, Director of Real Estate Fund Management at LGIM Real Assets.

“CBRE is delighted to have advised Legal & General on the acquisition of the North Tower at Deansgate Square. The North Tower marks CBRE’s second transaction with L&G at Deansgate Square and demonstrates continued confidence in Manchester’s residential market following the strong occupier demand experienced at the West Tower. On completion, the North Tower will provide exceptional residential accommodation, providing more renters with the opportunity to experience life at this desirable residential address,” said Tom Sinclair, Residential Investment Director at CBRE.