L&G launches £500m PBSA platform

Legal & General Investment Management has formed a £500m platform to acquire operational purpose-built student accommodation assets. L&G Student Living Platform will deploy £500m over the next two years, with the longer-term goal of growing the portfolio to more than £1bn and directly managing 5,000 beds across the UK. LGIM, backed by Legal & General Retirement Institutional, has acquired two assets in the Aqua Portfolio from Global Student Accommodation for £122m. The assets, Clifford House in Exeter and Scotway House in Glasgow, were completed in 2019 and have proven historical rental growth and consistent 98%-plus occupancy, and have established a strong reputation in their respective student markets. Clifford House consists of 312 bedrooms, while Scotway House has 399 bedrooms. LGIM has been operating in the student accommodation sector for more than 10 years following its first investment in 2011. It currently manages more than £1.2bn in the sector, across equity and debt investments. Adam Burney, head of BTR annuity at LGIM, said: “Investing in direct-let PBSA assets forms the next iteration of our living sector strategy. The sector has demonstrated its alignment with our strategic requirements, including a significant focus on ESG, and provides diversification. Following the success and growth of our BTR platform, this strategy further supports the long-term investment goals of LGRI.” Andrew Kail, chief executive of LGRI, added: “Pension scheme capital is being put to positive use in the real economy, with tangible benefits across generations. These buildings provide students with quality accommodation, while the British economy as a whole should benefit from long-term investing in real assets. “We are proud of how expertise from colleagues has unlocked these benefits both for the new generation as well as the long-term future of those looking to a sustainable pension.” Knight Frank advised LGIM on the acquisition; MTRE advised GSA. Photo © Norbert Levajsics/Unsplash