The £7.5bn Santander UK Group Pension Scheme has bolstered its portfolio with £400m of commercial properties formerly belonging to the Royal Mail Pension Plan (RMPP).
The 63,000-member scheme purchased the 22 properties from the UK government’s Shareholder Executive, which inherited assets when it took on the pension liabilities of the RMPP in 2012.
The transaction will see the scheme invest in freehold and leasehold properties including office space, industrial parks and shopping centres across the UK.
Santander UK director of pensions Antony Barker said: “We are delighted that we have been able to secure such a diverse portfolio of high quality properties and tenant covenants. Property forms a core part of our investment strategy for the group pension scheme as it seeks a return profile from its investments able to match future liabilities.”
On 31 March last year Royal Mail transferred £28.5bn of the RMPP’s £31bn in assets to the government’s balance sheet as part of the Postal Services Bill, forming the new Royal Mail Statutory Pension Scheme (RMSPS) in the process.
The so-called ‘pensions solution’ resulted in a smaller, leaner £2.5bn RMPP which remains in the hands of two sponsors: the Royal Mail Group and Post Office Limited (POL).
In September last year, Royal Mail Pensions Trustees chief executive Gerry Degaute told portfolio institutional the RMPP was considering an allocation to private debt as part of a wider push for diversification following the pensions solution.
He said: “Private debt is to credit what private equity is to listed equity… it is looking at other buckets for the return-seeking space which potentially, given our smaller size, is easier to do now.”
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