Legal & General acquires two West End properties

Legal & General's Linked Pensions Fund has completed the acquisition of two further West End office investments.

The freehold interest in 103 - 109 Wardour Street was acquired from clients of CBRE Investors at a price of £17.8m representing an equivalent yield of 4.5%. The property comprises a modern office building let to Euro RSCG KLP Ltd on a lease expiring in June 2017 and a ground floor restaurant unit let on a lease expiring in December 2022, totalling approximately 17,750 sq. ft. The total income is £822,500 per annum.

The virtual freehold interest in 3 - 4 Albemarle Street was acquired from Scottish Widows at a price of £31.06m, representing an equivalent yield of 4%. The property comprises approximately 16,200 sq. ft of office accommodation and approximately 3,000 sq. ft of gallery accommodation. The recently refurbished offices are let to a number of tenants on leases expiring in 2011 and 2016. The total income following expiry of rent free periods will be £1,171,756 per annum. The majority of the offices are let off rents of between £62.50 psf and £65 psf. Continued demand for quality space is driving the reversionary potential, with the 4th floor under offer at a rent of £85.00 psf.

Both properties provide modern well configured accommodation in core locations. Legal & General were represented by GVA Saxon Law.

During the course of 2006 the Fund continued to attract significant new cash investment, averaging in excess of £24m per month. The Fund now exceeds the £1 billion mark.

Fund Manager, Duncan Miller comments: "The significant and continued new investment to the Fund is testimony to the appeal of the Fund to the investor. The Fund has delivered out performance against benchmark on a 1, 3 and 5 year basis. Furthermore the Fund is well placed for future performance with a strategic over exposure to the office sector, including Central London and South East where strong rental growth is forecast."

In 2006 the Fund undertook 30 property transactions amounting to £360m. These included the acquisition of 10 assets amounting to over £300m, targeting the office sector, and the sale of 20 smaller assets amounting to a total value of £60m.

Target acquisitions for 2007 include all sectors, with specific focus on retail warehouse schemes and offices, with target lot size of £30m to £70m.