Legal & General will follow its £162m investment in a Leeds project with “at least another two” similar deals before the end of the year, as its £1.5bn partnership with the government’s Regeneration Investment Organisation (RIO) begins to bear fruit.
Following this week’s announcement of the investor’s purchase of a 50 per cent stake in the Thorpe Park Leeds scheme, L&G Capital director of direct investments Laura Mason told Construction News: “There are at least another two [deals] that we are working on that we hope will not be too far behind.”
The Leeds project includes construction of the first section of the East Leeds Orbital Road; it could create 13,000 jobs and unlock 7,000 new homes in the area.
The next two potential investments will also be outside of London, in line with RIO’s goal of driving investment in projects away from the capital. They are also likely to be similar in size to Thorpe Park Leeds.
RIO was set up by UK Trade & Investment to drive foreign investment into projects. It has a pipeline worth £100bn.
Ms Mason said she hoped L&G’s partnership with RIO, which was initially struck in January, will encourage overseas institutional investors, including pension funds, to invest in UK regeneration projects.
“It’s not supposed to be a flash in the pan,” she said. “It will be over a period of time. What we’re aiming to do is change the way some of these projects are financed.
“We’re using the model to demonstrate that we think this is a good investment and find others that are interested.”
L&G could extend its current commitment of £1.5bn to RIO projects.
“That £1.5bn was to show our seriousness but if there is more opportunity we’d be happy to invest,” said Ms Mason. “It was a good marker in the sand and seems a very doable number for us.”
L&G head of real assets Bill Hughes last month accompanied prime minister David Cameron on a tour of south-east Asia to promote investment into UK infrastructure, in particular in the so-called Northern powerhouse.