Macfarlanes has advised Legal & General Property, one of the UK’s largest and most established property fund managers, on the establishment of its second UK Property Income Fund (PIF II), a fund targeting a gross asset value of £750m and established for the purpose of investing in an income-focused diversified portfolio of UK commercial property.

PIF II is a closed ended English Limited Partnership with a seven year life which aims to capitalise on the success of a similar strategy implemented by Legal & General Property with its first UK Property Income Fund. PIF II has been structured so as to offer investors either a geared or ungeared exposure to the underlying commercial property investments.  Geared investment is facilitated by a £150m senior banking facility which has been put in place for PIF II and on which the firm also advised.  The banking facility was arranged by Wells Fargo Bank N.A., London Branch and Abbey National Treasury Services plc and is to be made available to offshore special purpose vehicles set up by PIF II for the purposes of acquiring and owning commercial property investments.

Macfarlanes also advised on the first property investment of UK PIF II, the Overgate shopping centre in Scotland, which was itself the subject of a complex ownership and acquisition structure.  Subsequently the firm has acted on the purchase of two city centre buildings in Birmingham's business district from receivers for £87.5 million on behalf of UK PIF II.

Advice for the setting up of PIF II was led by Macfarlanes investment funds partner Alex Amos, with senior solicitor Jagdip Gujral.  Tax advice was provided by partner Damien Crossley with James McCredie. The banking facility elements were led by banking and finance partner Jat Bains, with senior solicitor Niamh Dennehy-Maher.  The acquisitions of both Overgate and Birmingham were led by commercial real estate partner Steven Pitchford, supported by senior counsel Felicity Lindsay and Mark Slade.