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L&G on track to reach £1bn investment mark in Wales

Financial services giant L&G is increasing its investment in property and transport infrastructure projects in Wales to the £1bn mark.

The latest funding, understood to be in the region of more than £200m and close to being signed off, will build on the FTSE 100 firm’s investment of nearly £750m which has included its forward funding of the Central Square office led development in the centre of Cardiff, the nearby new hotel for the WRU on Westgate Street, Parkgate, which will open later this year, as well as the Department for Work and Pensions’ new building in Nantgarw and Aston Martin’s car factory in the Vale of Glamorgan.

It has also provided £200m in financing new rolling stock for the Transport for Wales operated Wales and Borders rail franchise.

L&G, which is bringing its current Cardiff offices at Knox Court and Brunel House, where it currently employs 1,800, into a new HQ at the under construction Interchange scheme at Central Square, is aiming to become a leading UK housing developer with a focus also on the growing build to rent market.

The office element of the Interchange, which will extend to 120,000 sq ft and will be ready for occupancy in 2023, will also provide a new bus station for the city and more than 300 build-to-rent apartments for L&G’s Build to Rent Fund.

L&G wouldn’t comment when asked if its next tranche of funding in Wales would be residential focused or which of its funds or managed funds would be utilised. It also wouldn’t comment on whether the Central Quay development from Rightacres Property could be a potential location for it to develop a major housing scheme.

The waterfront scheme, immediately south of Cardiff Central Rail Station and Central Square, could extend to around 14 acres. Longer-term Central Quay could see around 2.5 million sq ft of new office, residential, restaurant and bar space built.

A number of projects already have detailed planning consent, including the 160,000 sq ft Ledger building, a multi-storey car park and the redevelopment of the listed Brewhouse building.

Next to the Central Quay scheme, on brownfield land at Dumballs Road, Vastint has lodged an outline planning application for its proposed development, the Embankment, with Cardiff Council. The plans include up to 2,500 new homes, benefiting from close proximity to the city centre and its public transport infrastructure. Transport for Wales is working on plans for a new tram train route from Cardiff Central Train Station running through Central Quay and then across Callaghan Square down to Cardiff Bay, with longer-term aspirations for the route to continue through Rover Way and eventually linking up with the Great Western Main Line.

Cardiff-born Tom Roberts, head of strategic investment at L&G Investment Management Real Assets, confirmed plans to take investment activity in Wales to the £1bn level this year.

He said: “We are looking at opportunities within Cardiff, but also in markets we haven’t yet invested into in South Wales and beyond. Affordable housing is a growing area of our business as is an increased focus on infrastructure projects.”

Chief executive of Rightacres Paul McCarthy said:“Is there another city in the UK where they (L&G) have committed this kind of money? Other than Manchester, which is a mini-London, there isn’t and L&G are the lynchpin between the developer and the tenants and have been critical in creating momentum.

“When you have got HMRC (which has a new Wales HQ at Central Square) saying yes or no to being in a particular location they want to know if the core team is super strong and are committed and that is what you have got here in Cardiff.”

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Swansea-born Laura Mason, chief executive of L&G’s institutional retirement business, said its investments in South Wales, and in Cardiff in particular, was based on strong collaboration.

She added: “Part of the reason why we have been able to do it (funding), is because the council (Cardiff) have been so helpful, which actually isn’t the same everywhere. There are similar conversations that we started with other local authorities at the same time that we did with Paul (McCarthy) and Cardiff Council and in that time we have gone on to deliver in Cardiff, but in some of those other cities and towns across the UK we are still at the conversation stage.

“The Central Square scheme has got to be one of the best regeneration stories in the UK for a while.”

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