LONDON, Jan 19 (Reuters) - Insurance group Legal & General wants to build five new towns across Britain over the next ten years at a cost of up to 5 billion pounds ($8.22 billion), the company’s chief executive told the Sunday Times.
The firm, which manages 440 billion pounds in assets globally, said building new towns and regenerating inner cities was the best way of addressing Britain’s housing crisis, and would also meet L&G’s aim of investing more of its pension fund money in infrastructure.
“If we can bring communities with us and agree planning, we’d like to help build several new towns across the country. We’re already developing towns within cities, in partnership with enlightened local authorities and boroughs,” L&G’s Chief Executive Nigel Wilson told the newspaper.
L&G said in March last year that it was looking for more opportunities to invest directly in infrastructure after it took a stake in British housebuilder Cala Homes. In December, it invested 169 million pounds in infrastructure assets including a chain of care homes and a planned new hospital.
Housebuilding in Britain is at its lowest in about 90 years and economists say the country needs 250,000 homes a year to keep up with population growth, with demand far exceeding supply.
Insurers are keen to invest in infrastructure because of the long duration of the commitments and the steady, inflation-linked returns from rents, which are well-suited for covering the companies’s pension liabilities.