L&G opts to keep hold of Manchester BTR asset 

The investor has opted not to sell the 38-storey North Tower at Deansgate Square. 

L&G said the decision to keep hold of the 276-apartment asset it bought in 2020 demonstrates the investor’s “conviction” in both build-to-rent and Manchester, it said. 

North Tower, developed by Renaker as part of Deansgate Square, was previously owned jointly by L&G’s Managed Fund and UK Property Fund. It is now solely owned by the Managed Fund. 

L&G announced it was looking for a buyer for the tower last October. However, four months on, Rob Codling, senior fund manager at LGIM Real Assets, announced it will be staying under L&G’s management.

“We’re pleased to share that North Tower is being kept in-house, under full ownership of the Legal & General Managed Property Fund,” Codling said. 

“The opportunity enables the fund to strengthen its exposure to alternative and operational sectors which includes build-to-rent. In doing so, we are continuing to reaffirm our conviction around the sector and the strength of investment in Manchester, as one of Europe’s fastest growing cities.” 

When North Tower was put up for sale, commentators said that any deal would give an indication of the state of the regional BTR market. 

Very few established BTR schemes have traded in Manchester in recent years. As a result, it is not clear how the value of the sector has shifted amid the economic upheaval of recent years. 

In April 2022, Swiss Life Asset Managers entered the UK residential market, acquiring the 270-apartment Duet at Salford Quays from Moorfield Group for £74m, reflecting a net initial yield of 3.54%.    

Barings acquired Trilogy in September 2021 for £55m, a NIY of 4%.  

The North Tower deal would have given an indication of how the market has fared since the war in Ukraine and Liz Truss’s mini-budget.