Legal & General Property has acquired the property housing Mitchells & Butlers’ headquarters and associated hotel in central Birmingham from La Salle Investment Management for £69.5m.

The acquisition, which generates a 3.94% yield, was made on behalf of L&G’s LPI (Limited Price Inflation) Income Property Fund.

The building was purpose built for M&B in 2003 and extends to 95,000sq ft. It is let in its entirety to the managed pub operator for 35 years from January 2009 with RPI-linked rental increases.

Derek Gilby, senior fund manager at Legal & General Property, said: “The first major regional city centre office asset for the fund, we believe that Birmingham is set to benefit from a number of significant infrastructure projects already under way and the asset is well positioned to gain from the regeneration of the adjacent Paradise area, which is undergoing a rapid transformation.”