LGIM Real Assets (Legal & General) has announced that it has acquired Waterfront Leisure scheme in Stafford, UK on behalf of its Leisure Fund from developer LXB Retail Properties. The new scheme was purchased for £9.9m.
Legal & General said of the move that it is committed to transforming towns and cities across the country. As part of this approach, its dedicated Leisure Fund has deployed £90m alone this year into new leisure developments in areas where existing provision is lacking, creating new jobs and contributing to the growth of the local economy.
Marking its latest acquisition of 2018, Waterfront Leisure, the Fund’s new 50,642 sq ft development, comprises seven units, fronting the River Sow. It has been purchased with 50% of units pre-let, by square foot, with restaurant space currently leased to Nando’s and Frankie & Benny’s on 15 year terms. It is anchored by the first purpose built Odeon Luxe Cinema under a 25-year lease agreement.
Formed in 2002, the Leisure Fund Limited Partnership has over £600m of assets under management, comprising 18 prime leisure assets occupying dominant positions across the UK and a major development scheme in York. The fund aims to offer an attractive income profile, with a weighted average unexpired lease term of close to 15 years that is backed by strong covenants and with over 50% of the income benefiting from being inflationary linked or incorporating fixed uplifts as well as an extremely low void rate.
RPA Perspective In 2017, the Fund delivered a strong total return of 12.9% to its institutional investors, which compared favourably to the MSCI All Leisure Benchmark which generated 10.2%. The Fund is managed by Andrew Ferguson (Senior Fund Manager) and Louis Storrar (Senior Asset Manager).
Ferguson said: “This is a positive addition to the Fund, once again providing the opportunity to revitalise our towns with schemes fit for today’s environment and spending habits. As with our other leisure schemes, it provides an attractive yield profile with strong and dynamic anchor tenants.
As a whole, there is now a real momentum in the leisure sector as consumers crave new experiences. Operators are expanding to meet this demand whilst a breadth of new innovative concepts are coming to market, offering everything from new luxury cinemas to virtual reality and a breadth of competitive socialising concepts. As we look towards 2019 and beyond, we have increasing appetite for further new development deals, in areas which lack sufficient provision for today’s consumer. These allow us to shape the operator profile and provide schemes which are targeted to changing dynamics, allowing us to bring a new and sought after offering to the UK’s towns and cities.”
Legal & General has recently released its Leisure Futures Report, addressing the challenges and opportunities the sector is facing, providing key findings on how leisure services have and continue to evolve, who the tenant of the future is and what are the physical space requirements. It provides a varied toolkit including interviews with some of the core Leisure Fund tenants, insight from leading market agent Savills and a glimpse into the future from consumer trends agency The Future Laboratory.
