16 November 2015

BBC DEAL TRIGGERS L&G INVESTMENT

Legal & General and Rightacres today announce that the signing of the BBC deal at Central Square in Cardiff has triggered the first phase of investment by Legal & General, enabling the joint venture partnership to develop the next phase of its £400m Central Square Cardiff regeneration scheme announced in September.

The BBC signing of a 20 year lease with five yearly RPI linked rent reviews allows Legal & General Retirement's annuity funds to invest in financing the 150,000 sq ft building.

Urban regeneration offers an attractive asset class for long-term institutional money including annuity funds, as it provides stable revenues and enhanced long term returns to fund retirement income for customers. Regeneration is economically and socially useful - it deploys long-term savings to stimulate economic growth and jobs.

All three components of Legal & General's business model for infrastructure investment and urban regeneration are being utilised in Cardiff:

- Direct investment through Legal & General Capital (LGC) to kick start key urban regeneration projects

- Direct investment in specific buildings by Legal & General Retirement's (LGR's) annuity funds to match long-term pension liabilities

- Property expertise and asset management by Legal & General Property (LGP), which is establishing multiple infrastructure and urban regeneration asset class.

This unique combination of principal and agency investing by L&G is a highly replicable model, and forms the basis of the £15bn funding vehicle launched by L&G with Government's Regeneration Investment Organisation (RIO) in January 2015. Cardiff represents its second major city investment, having led with Leeds alongside partners Scarborough Group.

The Cardiff deal includes the acquisition by LGC of One Central Square, a 135,000 sq ft office development, which is due to reach practical completion in February 2016 and is part-let to law firm Blake Morgan. It also comprises the forward funding of Two Central Square - a 120,000 sq ft building which will be built in parallel with the BBC. Both office buildings are experiencing strong occupier interest.

Laura Mason, Director of Direct Investment at Legal & General Capital, commented: 'LGC is unlocking momentum and driving the regeneration forward. The positive economic impact of this investment will be not only felt by Cardiff itself, but by the whole of Wales. The BBC's commitment will also attract other major occupiers to the area, therefore fuelling jobs growth, as well as other social, cultural and economic benefits.'

Paul McCarthy, Chief Executive of Rightacres, said: 'Having Legal & General as our partner has rapidly accelerated the development of Central Square. They understand Cardiff and support its ambition to become one of Europe's most liveable cities. The regeneration of Central Square will hopefully play a key role in helping Cardiff achieve its ambitions.'

Tom Roberts, Senior Transactions Manager at Legal & General Property, added: 'This is a significant milestone in the scheme's exciting evolution and reflects the growing momentum that is gathering. With strong occupier interest in the other buildings, we feel confident that we will be able to deliver this major urban regeneration scheme ahead of the timescales previously envisaged and act as a major positive boost to the city.'

Matt Philips, Managing Partner at Knight Frank, said: 'L&G's commitment to Central Square represents the largest property deal ever seen in Wales and is a massive vote of confidence in Cardiff. The Central Square Scheme is pivotal to Cardiff and the wider region. Rightacres and Cardiff Council's vision for the scheme has and continues to be game changing and this partnership with L&G now ensures its delivery.'

Knight Frank's Cardiff office acted for L&G.

- Ends -

For further information, please contact:

Olivia Goodall

Head of Communications

Legal & General Capital / LGIM Real Assets

020 3124 2777

Notes to editors:

Central Square

The City of Cardiff Council and Rightacres entered in to a Development Agreement in 2013 to deliver the Central Square Masterplan. At the centre of the development is the new BBC Wales HQ which has been designed by Foster + Partners. One Central Square (135,000 sq ft) is due for completion in Jan 2016. The Council is also working with Rightacres to develop a new transport Interchange as part of the regeneration scheme.

www.centralsquarecardiff.co.uk

Rightacres

Rightacres is a family owned business based in Cardiff and chaired by founder Michael McCarthy. Now run by his son Paul, Rightacres has developed over two million square feet of commercial space in Cardiff. Previous JV's include Callaghan Square in Cardiff with MEPC and the Holland House Hotel chain with Macdonald Hotels.

www.rightacres.co.uk

Legal & General Capital

Legal & General Capital (LGC) focuses on direct investments in four key sectors: UK Housing, UK Urban Regeneration, Alternative finance and Clean Energy. These reflect our aim to invest for the long term in economically and socially useful assets, to secure competitive returns and to create new asset classes for Legal & General's varied investment requirements, for our partners and for the wider marketplace. We work closely alongside other businesses within Legal & General to ensure the broadest range of skillsets are deployed on any project and to utilise principal investment and asset management synergies across the Group. Investments to date have included CALA Homes (housebuilding), Media City/Salford (urban regeneration) and Pemberton (Alternative finance).

www.legalandgeneralcapital.com

Legal & General Property

Legal & General Property (LGP) forms part of the Real Assets division of Legal & General Investment Management (LGIM), which is responsible for the company's direct investment capabilities in property and infrastructure. One of Europe's largest institutional asset managers and a major global investor, LGIM manages £714.6bn in assets on behalf of over 3,100 clients (30 June 2015), providing products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 19 funds or vehicles with an aggregate asset value of £16.7bn (30 June 2015). www.lgim.com

Legal & General Retirement

Legal & General Retirement participates in the insurance solution pension de-risking market for nearly 30 years and was voted Risk Reduction Provider of the Year at the 2014 and 2013 UK Pensions Awards and Risk Management Provider of the Year at the Pensions Age Awards 2014. Legal & General was also voted Insurer of the Year at the 2014 Insurance Risk Awards. Legal & General provides annuities to pensioners and has completed a number of landmark transactions. These include the $900m deal with Philips in the US in partnership with the Prudential Insurance company of Amercia in 2015, the £3bn bulk annuity arrangement with the ICI Pension Fund, the largest bulk annuity policy arranged by a pension scheme in the UK to date, secured in March 2014 and the £3.2bn longevity insurance transaction with the BAE Systems 2000 Pension Plan in February 2013. Legal & General manages £43.4bn of annuity assets as at 30 June 2015.

Legal & General offers a range of de-risking solutions, which includes buyout, buy-in, longevity insurance and liability-driven investment (LDI), to pension schemes of all sizes. Legal & General is also able to tailor a combination of LDI and longevity insurance to provide 'DIY buy-in' solutions. Legal & General has expertise in investment management, all aspects of defined benefit provision as well as an in-depth understanding of mortality trends and longevity risk. The excellent services we are able to provide also include payroll, administration and communications services.


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