A new ownership deal for 120,000 sq ft of under construction office space in the centre of Cardiff has been agreed.
Legal & General, on behalf of its long-term asset holding Limited Price Inflation (LPI) Fund, has exchanged contracts which will see it acquiring the grade A office element of the Interchange development at the Central Square scheme in the centre of the city.
The ownership will take effect when the £140m Interchange scheme is completed in late 2022.
It is currently an asset which is being forward funded by L&G’s capital fund. The scheme is being delivered by property development firm Rightacres, which is behind the wider Central Square scheme.
The deal doesn’t include the new bus station on the ground floor of the Interchange and its related retail space, which will be owned by the Welsh Government and operated by Transport for Wales. Also outside the deal is the scheme’s 300-plus build-to-rent apartments for L&G’s Build to Rent Fund.
The eight storey office phase of the Interchange will see L&G itself being the occupier by bringing its current workforce of around 1,800 in the city (currently at Knox Court and Brunel House) under one roof.
The value of the NPI Fund deal has not been disclosed, but is understood to be in the region of £65m. Property advisory firm Knight Frank acted for the NPI Fund on the deal.
The Interchange is one of three latest deals across the 海角视频 which has seen the LPI Fund expand its investment portfolio to £1.8bn
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As well as the Interchange it is funding a 90,000 sq ft office building in Peterborough for 1,000 staff from the Department of Environment, Food and Rural Affairs and HM Passport Office.
It has also committed to funding a 30,000 sq ft veterinary college at Keele University, plus an additional 26,000 sq ft of space to be sub-let by the university.
Derek Gilby, senior fund manager at LGIM Real Assets, said: “Amidst the Covid-19 crisis, secure, long-term income streams, underwritten by strong covenants, have remained robust. Against this backdrop, and aligned with LPI’s investment strategy, we have committed to a string of deals, enhancing our portfolio and positioning the fund for a strong start to the year. We expect to see further growth to our £1.8bn investment portfolio in the coming months.