Glasgow City Council has secured £285 million in funding from Legal & General Investment Management (LGIM) to help pay for its historic equal pay settlement.
The council said this is the first of three deals to finance the settlement, with the other two on track to be signed during summer recess.
LGIM Real Assets said it committed £285 million in funding to City Property Glasgow, a wholly owned subsidiary of Glasgow City Council.
The deal involves the refinancing of City Property’s existing portfolio as well as its purchase of the SEC Armadillo, Glasgow City Halls and Glasgow Museums Resource Centre — all of which will be leased back by Glasgow City Council.
“Legal & General’s long-term financing is secured on an underlying property portfolio of 473 commercial assets located in and around Glasgow,” said LGIM.
“The portfolio includes a range of ground rents, office assets and industrial estates, as well as strategic assets.
“These include two historic landmarks, the SEC Armadillo and City Halls, which have been retained by Glasgow City Council for the benefit of the community.
“This investment provides an excellent match for Legal & General’s long term annuity and pension commitments, and marks another significant investment in Glasgow.
“In the last year, Legal & General has made a number of investments in the city.”
Lorna Brown, head of real estate debt at LGIM Real Assets, said: “This transaction is testament to our ability to provide significant and complex financing to the public and private sector and our commitment to investments which have a positive social impact.
“Legal & General is pleased to support Glasgow City Council in addressing their historic pay issues through the provision of the majority of the capital required to meet this liability.”
Glasgow City Council leader Susan Aitken said: “Settling Glasgow’s equal pay dispute and delivering pay justice for our women workers is a hugely significant step forward for the council and the city as a whole.
“This deal not only means we can start to put right a historic wrong, but do so while safeguarding the future of the city’s property assets in public use.
“I’m very pleased to be doing that in partnership with Legal & General, which continues to show great confidence in Glasgow as a place to invest.”
Pete Gladwell, head of public sector partnerships at LGIM Real Assets, said: “This provision of funding demonstrates our commitment to investing in UK regions, and a partnership between a forward thinking institution and local authorities.
“We are pleased to support Glasgow City Council in delivering pay justice; it marks the start of a deeper partnership between Glasgow City Council and Legal & General; we view this as a basis for further investment to meet the city’s long term needs and aspirations.”