Legal & General targets a further £2.5bn of pension money to invest into BTR, delivering 7,000+ new homes over the next five years

16 February 2022

The investments will deliver Build to Rent homes for local communities

Legal & General Retirement Institutional (“LGRI”), a division of the Legal & General Group (“Legal & General”), today announces that it targets to invest £2.5bn of Defined Benefit (DB) schemes’ retirement funds into Build-to-Rent (“BTR”) schemes over the next five years, which will create around 7,000+ new homes.

LGRI invested over £500 million in 2021 on the development of four BTR schemes in Stratford, Hove, Southampton and Lewisham, which will create over 1,300 new homes for the local communities. The first residents are expected to move into the Hove and Southampton developments in 2024.

LGRI invest with the support of Legal & General Investment Management Real Assets (LGIMRA), which is one of Europe’s largest institutional asset managers and a major global investor. LGIMRA is one of the largest investors into BTR and has already invested c£2.5 billion into twenty BTR schemes around the UK, with 2,700 apartments already operational and a further 6,000 under construction.

Legal & General’s well established BTR platform directly develops and works alongside third parties to create best-in-class BTR schemes, which help to tackle the UK’s housing crisis by using pension funds to deliver thousands of new homes. Crucially, the housing provision is part of Legal & General’s plans to regenerate derelict, unused sites in the UK’s towns and cities to deliver economically and socially useful assets. Through these investments, spread across the UK, Legal & General further demonstrates the principle of “Inclusive Capitalism” which supports the Government’s “Levelling Up” agenda.

The BTR apartments are designed with a focus on lifestyle and resident satisfaction, ensuring quality, operational efficiency, and long-term environmental sustainability that meet the needs and aspirations of residents.

To align with Environmental, Social and Governance (ESG) commitments, LGIMRA adhere to the standards set out by the London Energy Transition Initiative (LETI) and the UK Green Building Council (UKGBC) outlined in its report, “The future of Build-to-Rent in a net-zero world”. This includes reducing carbon emissions associated with construction and using renewable energy. All Legal & General BTR units are targeting Net Zero Carbon in operation by 2030.

Legal & General’s report “The Power of Pensions”, published in 2020, highlights how DB pension money can be used to plug the UK’s £1 trillion infrastructure gap over this decade. The report states that investing DB pension funds can create a virtuous circle of older UK savers funding infrastructure assets that provide a public service, increase the productivity of the wider economy and generate the right level of returns for pension members.

Source: Legal & General