L&G Funds $5.1 Billion Oxford University Property Development

(Bloomberg) -- Legal & General Group Plc will invest 4 billion pounds ($5.1 billion) into a housing and office developments planned by the University of Oxford.

The U.K. asset manager’s Future Cities business formed a joint venture with the university to develop thousands of homes for students and staff in the city, according to a company statement. The average home price in Oxford is 407,300 pounds, according to the Zoopla U.K. Cities Index. That’s the third-highest level in the country behind London and Cambridge.

Oxford’s technology industry has boomed as the university has spawned startups and lured global businesses attracted by its highly skilled labor force. Restrictions on new housing in the countryside around the historic city have limited supply even as demand has soared, forcing home prices higher and making the city unaffordable for many.

“We look forward to working together to address some of the most pressing challenges facing the university,” University of Oxford Vice-Chancellor Louise Richardson said in the statement on Thursday. “We will build much needed graduate accommodation, subsidized housing for university staff and new science parks, where academic departments, university spin-outs and commercial partners can work together to create new companies as well as high quality jobs.”

The venture will receive funding from L&G’s shareholder and client funds and from annuities, according to the statement.

L&G has been pouring capital into housing and commercial developments in the U.K.’s growing cities as it seeks to create assets that it can manage long-term to match pension liabilities. Its Future Cities business has funded about 2.5 million square feet of commercial space and more than a thousand new homes.

To contact the reporter on this story: Jack Sidders in London at jsidders@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick Henry

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