L&G buys GPA Leeds hub for £211m

Legal & General has bought a government-let Leeds office scheme for £211m from joint venture partners Hermes Investment Management and Canada Pension Plan Investment Board. Legal & General Retirement will forward-fund the 377,730 sq ft project at 7-8 Wellington Place, which is being developed by Oxfordshire-based MEPC. Investment giants Hermes and CPPIB still own the rest of the wider Wellington Place estate. Once completed, the wider scheme will total 1.5m sq ft of commercial, retail, leisure and residential space. The government pre-let 7-8 Wellington Place in 2017 on a 25-year lease. The building has been fully let to The Secretary of State for Communities & Local Government on behalf of HMRC and NHS Digital. Other tenants include The Stars Group, which signed a pre-let for 134,000 sq ft of office space at 4 Wellington Place for Sky Betting & Gaming, as EG revealed in May. The deal is understood to be one of the largest-ever office sales in Leeds and is also the latest in a series of L&G forward-funding deals for government hubs. L&G has now invested £1.5bn in 10 government hubs, with others based in cities including Edinburgh, Bristol, Liverpool and Birmingham. Gordon Aitchison, director of investment and development at LGIM Real Assets, said: “These investments are a perfect match for our UK pension commitments, providing high-quality long-term investments while also aiding vital regional regeneration. As the second largest financial hub outside of London, with a strong and growing work force, our investment in Leeds will have a meaningful impact on the region, providing quality office space and creating tens of thousands of jobs.” As part of the hubs programme, first launched in June 2016, the government plans to move thousands of public sector jobs outside London by 2030. Civil servants will be consolidated into some 20 hub locations around the UK. The Government Property Agency was launched in 2018 to strategically manage the estates of multiple central government departments. In London, the government has opened a hub in Canary Wharf, where it has leased 542,000 sq ft at 10 South Colonnade. It has also opened a hub in Croydon, at Stanhope and Schroder’s Ruskin Square. In July, HMRC signed for the remaining 58,000 sq ft at L&G’s office development next to Westfield Stratford City, making it the sole tenant of the government hub. Knight Frank and Lewis Ellis advised L&G on the deal. To send feedback, e-mail lucy.alderson@egi.co.uk or tweet @LucyAJourno or @estatesgazette