L&G swoops on new-build Manchester BtR tower

LGIM Real Assets, the real asset arm of UK insurer Legal & General, has acquired a new Build to Rent (BtR) tower in the UK city of Manchester from local developer Renaker.

Financial details were not disclosed.

The asset, dubbed North Tower, is located in Deansgate Square and comprises 276 luxury apartments. Amenities include a two-storey gym, pool, sauna, fitness studio and full-sized indoor sports hall.

According to LGIM Real Assets, the deal has been made on behalf of its two largest balanced funds, the UK property fund and the Managed fund, in a 50:50 ownership structure.

Michael Barrie, director of real estate fund management at LGIM Real Assets, said: '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, BtR will continue to be a preferred subsector, giving us real-time access to occupational markets with a robust growth in rental income.'

The deal represents the Managed fund’s first BtR acquisition as part of a drive into alternative sectors. Launched in 1971, it has grown by £2 bn in the last six years to a current value of £3.4 bn.

The UK Property Fund was launched in 2006 and is worth about £3 bn. Its recent BtR deals include the acquisition of a 189-flat BTR site in Chelmsford.

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.

CBRE advised on the transaction.

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