Creating social impact through urban regeneration in the UK

Legal & General (L&G) has announced a €410 million (approximately £350 million) investment for the development of a new Build-to-Rent (BTR) neighborhood on a site of approximately six acres, part of which will be allocated to affordable housing, providing around 700 residential units in total.

The acquisition is being made through the Access Development Partnership (ADP), L&G’s joint venture with PGGM and Nest. This marks the second investment by this partnership in the United Kingdom within a year, highlighting the strategic use of long-term pension funds to finance urban regeneration projects with clear social impact and stable returns for investors.

The former Lambeth Hospital site is located in one of London’s boroughs with the highest housing supply pressure. Data indicate that annual new building permits in the city have fallen to their lowest levels since 2010, with 23 out of 33 boroughs reporting no new project starts in Q1 2025. Across England, new housing construction fell to 208,600 units in 2024/25, a 6% decline compared to the previous year and the lowest level since 2015/16. Although rental growth slowed towards the end of 2025, the market remains highly constrained, following a period in which rents across the UK increased by 7.7% year-on-year up to March 2025.

In this context of limited supply, large-scale brownfield developments with a strong financial foundation are considered critical for market stabilization. L&G, leveraging long-term institutional capital, can execute multi-phase developments that are insulated from short-term market fluctuations, providing stability for both local authorities and investors.

Particular emphasis is placed on collaboration with the public sector. Proceeds from the NHS land sale will be directed towards upgrading healthcare infrastructure, including the construction of the new Douglas Bennett House at Denmark Hill, which will house mental health services currently provided at Lambeth Hospital. This investment aims to improve therapeutic spaces and the experience of patients, carers, and staff, directly linking residential development to enhanced healthcare services for the local community.

The plan envisions a mixed residential scheme with varied tenancy arrangements, combining social affordable housing with private rentals. Modern amenities will be provided for residents, including co-working spaces, lounges, and a gym, along with carefully designed public areas. The project will adopt a fully electric design, emphasizing carbon reduction, increased greenery, and improved sustainable transport infrastructure. Upon completion, management will be handled by L&G itself, through its national residential property platform.

L&G is one of the largest residential property investors and managers in the UK. The Lambeth Hospital redevelopment represents the 26th addition to the company’s BTR portfolio. To date, L&G has invested over €4.7 billion (over £4 billion) in this sector, developing more than 10,000 homes, approximately 2,000 of which are in London.

At a group level, L&G, founded in 1836, manages total assets of around €1.29 trillion (£1.1 trillion), nearly 43% of which—approximately €585 billion—are international investments.

Nest, the UK’s largest occupational pension scheme, has around 14 million members and manages assets of approximately €70 billion (£60 billion), receiving new contributions of about €700 million monthly. By 2030, its assets under management are expected to reach €117 billion (£100 billion).

Similarly, PGGM Investment Management, which manages the assets of the Dutch PFZW fund, reported assets under management of €258 billion at the end of 2025.