BlackRock buys €155m garden centre portfolio from LaSalle

BlackRock Real Estate has purchased a portfolio of eight garden centres within The BlackRock UK Long Lease Property Fund for £112.5 mln (€155 mln) from LaSalle Investment Management, reflecting a net initial yield of 5.25%.

The purchase takes the total capital deployed by the fund since its inception two years ago to more than £420 mln.

The Ferndown Portfolio comprises six sites let to Wyevale Garden Centres, the largest garden centre operator in the UK, and two additional sites occupied by Notcutts and Squires Garden Centresspans. The centres are located in Bicester, Cadbury, Endsleigh, Cardiff and Woodford. The portfolio has a weighted average unexpired lease term of nearly 30 years.

The capital to purchase the portfolio came from existing pension scheme investors in the fund, seeking long-term, inflation-linked secure income to meet their liabilities, BlackRock said.

Geoffrey Shaw, portfolio manager of the BlackRock UK Long Lease Fund, commented: '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.'

'We acquired the portfolio in 2006 for a closed-ended vehicle at a time when investors were looking for stable, income-producing assets 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,' said Paul Jaffe, national director of LaSalle Investment Management.

BlackRock was advised by Gilbert Evans and JLL acted for LaSalle.