Legal & General Property (LGP) has acquired 1 City Place in Gatwick from RREEF for £39 mln (EUR 47.1 mln). After surrendering BT's lease on the property, LGP has also agreed a new 20-year lease with Nestlé UK.

The building, which was fully let to BT until 23 May 2017, had not been occupied for some time. The Fund will refurbish the building to Grade A quality for Nestlé. Constructed in 2002 and situated adjacent to Gatwick airport, 1 City Place comprises a headquarters office building arranged over a ground floor and three uppers, with a total of 12,150 m2.

The transaction was made on behalf of LGP’s UK Property Income Fund which reached its final close in October with a total geared investment capacity of £475 mln.

To date, the fund has acquired assets totalling £300 mln, including the Meadows Shopping Centre in Chelmsford; Fremlin Walk shopping centre in Maidstone; Guildford Business Park, Guildford; and Co-op distribution centre, Andover.

The UK PIF reached its final close in October 2011, after securing commitments totalling £300 mln from 14 major international institutional investors based in the Middle East, Denmark, UK, France, Finland, Switzerland and Japan. The closed ended fund has an innovative structure which allows investors to choose their preferred level of gearing of between 0% and 50% Loan to Value (LTV).

The fund aims to provide investors with returns of 15% (geared) and 10% (ungeared) through stock selection of large lot size assets which will be positioned to capitalise on the economic recovery in the UK based on a core/core-plus risk strategy.