Legal & General has bought its assurance division’s headquarters in Surrey for £65.25m, Property Week can reveal.
The fund manager has acquired the campus in Kingswood, which is let to Legal & General Assurance Society on a 20-year lease until 2025, from receivers.The fund manager has acquired the campus in Kingswood, which is let to Legal & General Assurance Society on a 20-year lease until 2025, from receivers.
L&G announced last year that it would shut down the 380,066 sq ft office and relocate the majority of the 1,800 staff to other sites by 2018.
Speaking at the time, L&G’s group commercial director Simon Burke said the building wasn’t “adaptable to changing business demands” and that it had “high rent and running costs”.
The 43-acre site was previously owned by a consortium of investors backed by the Royal Bank of Scotland, but was put into the hands of receivers last year. KPMG was appointed to consider the disposal of the site and in September instructed Knight Frank’s residential development team to seek offers in excess of £70m.
L&G told Property Week it was still “evaluating future potential uses of the site” following the purchase, but given its location a residential scheme could prove lucrative.
The campus, which includes a staff swimming pool, gym, sports field and tennis courts, was marketed as a residential investment, but Knight Frank said it could also be used for a senior living, hotel or mixed-use development.
Controversial decision
Any residential scheme on the site is likely to be fiercely opposed by locals as the campus sits on the green belt.
L&G’s decision to close its assurance division’s office has proved controversial. The company has maintained that the “vast majority” of staff will move to other sites after it closes, but the Unite union has been campaigning against the closure.
Last year, it commissioned a report that found the closure would “rip a £21m black hole” in the local economy.
Local MP Crispin Blunt has also criticised the decision. He described L&G’s plans to close the site as “highly regrettable” and urged Surrey County Council to move into the campus.
Kingswood Property Investments, a group backed by the Royal Bank of Scotland, acquired the site from British Land in 2006 for £73.6m.
The campus is located 18 miles south of central London and five minutes from Kingswood railway station, with trains running into London Victoria.
Knight Frank and KPMG declined to comment.
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