Asset manager BlackRock said its UK Long Lease fund has purchased a control centre of British automotive services RAC near the southwestern UK city of Bristol for £24.2 mln (€33 mln).

Asset manager BlackRock said its UK Long Lease fund has purchased a control centre of British automotive services RAC near the southwestern UK city of Bristol for £24.2 mln (€33 mln).

The acquisition brings the fund's total value to over £300 mln.

The property forms part of a £250 mln mixed-use portfolio which was put on the market last year by landlord National Grid Pension Fund and its fund management subsidiary Aerion.

National Grid aims to recycle the sale proceeds, which amount to almost a third of its property holdings, into higher yielding assets.

The RAC is a provider of breakdown assistance services in the UK with a 25% market share. The property has been let for a further 27.5 years to RAC Motoring Services, with annual inflation-linked reviews.

BlackRock was advised by Knight Frank and Aerion Fund Management was advised by CBRE.

'With bond yields at record lows, institutional investors need to consider new sources of "secure income" that offer a higher return potential but still allow them to meet long-dated liabilities. Against this backdrop, many are looking beyond traditional bond investments to alternative investments such as real estate,' commented Geoffrey Shaw, portfolio manager.

He added: 'This purchase ties in well with the strategy of BlackRock’s UK Long Lease Fund, which aims to build an inflation-linked portfolio that delivers a higher relative yield to help institutional investors match their liabilities.'