(Reuters) -Legal & General (L&G) and Federated Hermes Property Unit Trust (FHPUT) have merged their UK property funds to create a combined portfolio valued at 4.7 billion pounds ($6.37 billion), L&G said on Monday.
Commercial property investments have been hammered since the pandemic by higher borrowing costs and changing working patterns. The deal comes as tough trading has seen other UK property funds close or merge since COVID-19.
A significant share of Federated Hermes’ unitholders’ investments will be transferred to L&G’s Managed Property Fund (MPF), which will assume ownership of FHPUT’s real estate portfolio, the statement said.
“The MPF has been very acquisitive over the last 18 months, and this merger will continue to expand and strengthen our property portfolio,” said Rob Codling, head of commercial funds, Real Estate Equity at L&G.
FHPUT was launched in 1967, while L&G’s Managed Property Fund has been active since 1971.
($1 = 0.7381 pounds)
(Reporting by DhanushVignesh Babu in Bengaluru and Iain Withers in London; Editing by Rashmi Aich)
