Legal & General and local council in Somerset shopping centre deal

Legal & General has acquired the Sovereign Shopping Centre in Weston-Super-Mare, in partnership with North Somerset Council. On completion, the shopping centre will immediately be fully let to North Somerset Council, enabling it to retain over 60% of the shopping centre’s income with no borrowing or expenditure of its own. The shopping centre has been acquired through Legal & General’s LPI (Limited Price Inflation) Income Property Fund for £21m. The fund will lease the shopping centre to the council for a term of 35 years, at which point the ownership will revert in full to the local authority. The starting rent in the lease from the council to the fund will be £717,696 a year, rising with inflation and capped at 4%. This means the council will have surplus rental income of up to £1.1m a year, which it says can be used both to meet council budgets stretched during austerity, and curate Weston-super-Mare’s retail offer. Pete Gladwell, head of public sector partnerships at Legal & General, said: “Society is the sum of interrelations, and yet the financial sector has too often been a one way street; sapping wealth into speculation that benefits only a few. “Our support of North Somerset Council is a productive investment that supports the original source of society’s wealth communities across the UK.” He added that through a partnership with “a progressive and proactive council”, the company can help support the “regeneration of necessary retail provision” for the area as well as drive economic growth. To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette