The National Grid Pension Fund is to sell off nearly a third of its £800m property holdings.
NGPF subsidiary Aerion has instructed CBRE to sell a £250m portfolio of mixed-use buildings let on long leases, at a price reflecting a 4.8% yield. The properties are managed by LaSalle Investment Management.
The 12-strong portfolio comprises seven Premier Inns, a Spire hospital, a pair of office buildings let to the RAC, and two supermarkets let to Tesco in Southwark and Enfield.
The £15.5bn fund – which has a deficit of more than £1bn, according to its 2013 results – hopes to recycle the proceeds of the sale into higher-yielding assets.
The sale comes after a heated 18-month union dispute over attempts by National Grid to introduce new terms and conditions which would help reduce the deficit.
With an average weighted unexpired lease term of 24 years, the portfolio represents all of NGPF’s index-linked assets and is one of the largest long-let portfolios ever to come to market.
CBRE executive director Peter Arduino said: “Individual long-lease assets are very rare, to get a portfolio is almost unheard of. There is billions of pounds of demand for long-income fund assets, and now’s as good a time as any to recapture that demand.”
