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Legal & General Property (LGP) has acquired a mixed-use property in the centre of the UK city of Birmingham for £14.5 mln (€20.5 mln) on behalf of its Managed Property Fund.

The vendor was the Crown Estate, a semi-independent public body which manages UK sovereign property holdings worth around £11.5 bn (€16.2 bn).

The property, 43 Temple Row, is a 36,000 sq ft (3,344 m2) office and retail block which forms part of a prime block fronting St Phillips Square. The building adjoins the House of Fraser scheme which was acquired by LGP’s Managed Property Fund at the end of last year.

Mark Russell, senior fund manager of the £2.5 bn Managed Property Fund, commented: ‘The acquisition of 43 Temple Row supports our current Fund strategy to increase our exposure to business space assets with strong property fundamentals. We are optimistic about rental growth prospects for the right space in the major regional centres and particularly so where significant infrastructure investment is to be delivered.

‘St Philips Square is considered a prime location within Birmingham’s central core and benefits from close proximity to good transport links, including Snow Hill Station, New Street Station and Moor Street Station, as well as the new Midland Metro which is anticipated to complete in Q4 2015. In addition, we expect it to gain from improvements that we are looking to deliver to the wider block, working closely with House of Fraser.’

As it is unable to borrow, The Crown Estate funds investments in its core sectors through sales of non-core assets and by forming strategic joint ventures with major institutional investors. The Crown Estate focuses its investment on four core sectors where it has critical mass and specialist expertise; London’s West End, dominant regional retail schemes, strategic land, and offshore wind.

Hannah Milne, head of The Crown Estate’s regional portfolio, said: ‘Sales of non-core assets into strong markets have been key to driving our commercial performance over recent years, helping to provide new sources of capital for investment across our four core sectors. Outside of London, where our focus is on dominant regional retail and leisure schemes, we’re looking at how we can raise the quality of the assets we manage even further through refurbishments or new developments.’