FIRST RIO DEAL IN PARTNERSHIP WITH SCARBOROUGH GROUP SET TO DELIVER 7,000 HOMES AND 13,000 JOBS
Legal & General Capital (LGC), working in partnership with Legal & General Property (LGP), announces that it has acquired a 50% stake in Thorpe Park Leeds, a 200 acre mixed-use business development site in East Leeds, entering into a Joint Venture (JV) with Scarborough Group International (Scarborough Group). The joint venture will deliver phase two of Thorpe Park Leeds which has consent for a 1.35m sq ft mixed-use scheme. Thorpe Park Leeds is set to create a further 13,000 local jobs while potentially unlocking the construction of 7,000 new homes in the East Leeds area through the construction of the first section of the East Leeds Orbital Road, a key piece of road infrastructure.
The deal represents the first project to be delivered since the start of L&G’s Regeneration Investment Organisation (RIO) partnership launched at 10 Downing Street in January. Bringing with it an extensive network of international investor contacts and deep property expertise, L&G committed to co-invest £1.5bn into RIO pipeline projects alongside capital from other institutions and major overseas investors and is working with the government’s inward investment body, UKTI, to attract an additional £15bn of investment into critical regeneration projects that support UK growth.
LGC has purchased a 50% stake in Thorpe Park and committed to provide the finance required to develop it over a phased five year period. Scarborough Group, a specialist real estate investor and developer, has been involved with Thorpe Park Leeds for more than 20 years, having successfully built and sold the first phase of the scheme, and will act as development manager to the project. This year Scarborough Group received planning consent for the first 60,000 sq ft of offices and consent for 300 new homes on the site. The LGC investment will speed up the regeneration, and allows the JV a flexible and predictable source of capital to complete the scheme, whilst leveraging Scarborough Group’s unrivalled local development knowledge.
This latest investment from LGC again demonstrates that the UK can benefit hugely, both economically and socially, through institutional investment partnering with Government in order to facilitate major UK regeneration. It expands LGC’s portfolio of UK regeneration projects, which include schemes in Bracknell, Salford, Canning Town, Plymouth, Wakefield and Liverpool, and follows closely behind LGC’s investment into MediaCityUK with Peel – a £503m strategic regeneration project in Salford covering around 35 acres – which was also included in RIO’s original target list of projects but executed directly.
Sir Michael Bear, Chairman of RIO: “The United Kingdom is known internationally as an attractive place in which to invest in large-scale regeneration and infrastructure projects. For too long, however, investment has been focused on London and the South East. I am pleased that Legal & General have announced their first investment, under their partnership with UK Trade & Investment’s Regeneration Investment Organisation, alongside established developer Scarborough Group in Thorpe Park. Following the recent successful visit to Singapore and Malaysia, I would hope that investors from Singapore and Malaysia and other dynamic economies would follow the lead of a leading domestic player by investing in the significant growth opportunity the Northern Powerhouse represents.”
Laura Mason, Director of Direct Investments at Legal & General Capital, said: “Leeds has done an outstanding job in completing the first RIO deal with L&G. This major development will help bring the ‘Northern Powerhouse’ to life, supporting the wider Leeds economy and acting as a major catalyst for further investment in the UK’s cities and regions. Providing an excellent match for our long term money, we have worked in close partnership with our property asset management arm, regeneration specialist partners and the public sector to complete this transaction.
“Our approach demonstrates that we can deliver strong financial returns for our shareholders and policyholders, while unlocking major infrastructure projects that support the economic growth prospects of the UK by closing the funding gap. L&G’s investment in Thorpe Park also highlights to international investors the attractiveness of working with local partners to access high-quality investment opportunities in other parts of the UK which they may not have previously explored.”
Simon Marshall, Senior Executive at Scarborough Group, said: “This new partnership with Legal & General will be transformational for the delivery of Thorpe Park and is testament to the quality and potential of this market-leading regeneration project. We believe that this scheme is a once-in-a-generation opportunity for East Leeds. In partnership with Legal & General and with the Council’s on-going support, we are confident that we can create a truly unique and forward thinking mixed-use community that will contribute hugely to the economic prosperity of the area, creating new jobs, homes and facilities for East Leeds.”
Councillor Judith Blake, leader of Leeds City Council, said: “The investment by Legal & General is excellent news for the development of Thorpe Park and for the regeneration of Leeds. The impact of this project will be transformational for the local region, creating thousands of new homes and jobs, and reinventing the landscape of East Leeds.”