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Telereal Trillium sells RBS portfolio to Legal and General Property

Telereal Trillium sells RBS portfolio to Legal and General Property

06 March 2014

Legal & General Property (“LGP”) announces that it has completed the purchase of a portfolio of 55 assets backed by Royal Bank of Scotland (“RBS”) from Telereal Trillium for a total consideration of £550 million.

The combined investment by L&G Capital and L&G Retirement is part of L&G’s strategy to increase principal funds allocated to direct investments. The investment will assist L&G in the provision of annuities to its customers and its commitment to supporting UK infrastructure finance.

This significant transaction brings LGP’s direct property transactions to over £3.15 billion in the past year alone, acquiring £2.6 billion and disposing of £650 million, L&G continues to be one of the most active investors in the UK commercial property market.

Comprising 55 assets let to or guaranteed by RBS, the acquired portfolio is located throughout the UK with one asset situated in Dublin.  It includes a number of landmark London buildings, such as the Coutts Headquarters at 440 Strand, 63-65 Piccadilly and 97 New Bond Street.

Gordon Aitchison, Director of Investment and Development at Legal & General Property, said:  “This is one of the largest acquisitions to be successfully undertaken by a UK fund in recent years.  Securing this portfolio of high profile assets in a single transaction demonstrates the depth and breadth of L&G’s investment and principal platform, including our extensive transactional capabilities. 

“The portfolio comprises well located, high quality assets, heavily weighted towards London, including a number of trophy assets.  Backed by an A-rated tenant on long term index-linked leases, the bond like quality and duration of the income is exceptionally attractive as a match for L&G’s long dated liabilities.”

Graeme Hunter, Group Property Director, Telereal Trillium commented:  “We are delighted to complete the sale of this high-quality portfolio to Legal and General. We found that there was significant appetite for this investment opportunity, with a high level of interest from prospective buyers, reflecting the increasing buoyancy in the financial and property markets.”

The portfolio comprises 41 retail/banking units, 10 office buildings and four industrial sites.  As part of the transaction, three of the assets which are occupied by UKI Insurance will be sold to the tenant.

The RBS leases are subject to annual index linked rent reviews and have an average weighted unexpired lease term of 22 years. Around 45% of the income is derived from the London assets with a further 22% coming from those located elsewhere in the South of England.

CBRE and Ashurst LLP acted for Telereal Trillium. DTZ and Slaughter and May advised Legal & General.