BlackRock Real Estate has purchased a portfolio of eight garden centres from LaSalle Investment Management for £112.5m – reflecting a net initial yield of 5.25% – as revealed by Estates Gazette.
The assets were purchased by the UK Long Lease Property Fund, taking its total capital deployed to more than £420m since it was established two years ago.
The Ferndown Portfolio spans 91.3 acres, with locations in Bicester, Cadbury, Endsleigh, Cardiff and Woodford. It comprises six sites let to Wyevale Garden Centres and two additional sites occupied by Notcutts and Squires Garden Centres. The weighted average unexpired lease term is 29 years.
The capital to purchase the portfolio of sites came from existing pension scheme investors in the fund,.
UKLLF portfolio manager Geoffrey Shaw said: “The garden centre market is unique and purchase opportunities come around very rarely. The portfolio is well-placed to take advantage of future demographic shifts and this high quality set of assets will deliver strong index-linked income streams for the fund’s investors.”
LaSalle Investment Management national director Paul Jaffe said: “Garden centres are attractive to investors because they offer long index-linked leases, good quality operators and good underlying fundamentals. We acquired the portfolio in 2006 for a closed ended vehicle at a time when investors were looking for stable, income producing asset in an increasingly hot market. The portfolio has outperformed for investors and its sale comes during a year of high demand for UK commercial property.”
BlackRock was advised by Gilbert Evans and LaSalle was advised by JLL.
chris.berkin@estatesgazette.com
