The executors of the Luton Hoo Estate have sold 673ha (1,665 acres) of farmland between the M1 and Luton Airport to Legal & General.
L&G paid £3,706 per ha (£1,500 per acre) for the Hertfordshire land, which produces a yield of around 3.5%. The move is part of L&G’s strategy to buy land with long-term development potential close to airports and motorways.
Stephen Mundy, director of the L&G Life Fund, said it would not be making an early planning application, but he was confident of getting some change of use in the end: “The history of long-term land ownership is that you get something eventually,” he said. He pointed out that Pillar Property Investments recently bought 16.2ha (40 acres) of land at Capability Green Business Park in Luton for £618,000 per ha (£250,000 per acre).
“The maths of our deal is very favourable,” he added.
The fund this week also bought Central Park Industrial Estate at Trafford Park for £7.625m from PSIT, showing a net initial yield of 8.35% on an income of £657,710 pa. The yield is expected to rise to 9.5% on the 19,788m2 (213,000 sq ft) estate after forthcoming rent reviews are determined.
L&G also acquired 50.58ha (125 acres) on the M4/A34 intersection in Berkshire recently.
Mundy said the fund had spent £100m so far this year, with £120m of property under offer and in solicitors’ hands. “There’s a portfolio restructuring going on at the life fund,” he said.
“We’re using the increased liquidity in the market to reposition the portfolio in a slightly more active form.”
