BlackRock has held the second close of the BlackRock UK Long Lease Property Fund, which has invested GBP250m in 20 long lease property assets since its first close in June 2013.
It has since raised a further GBP60m, and has now begun to invest this additional capital.
The BlackRock UK Long Lease Property Fund has a diverse portfolio, with a focus on investing in assets that are integral to the tenants business. Properties the fund has invested in include a sale and leaseback with Technip in Aberdeen, which is on a 20 year lease, a car park at St James Street Nottingham on a 51 year lease and a Premier Inn Hotel at Gatwick on a 31 year lease.
Geoffrey Shaw, portfolio manager of the BlackRock UK Long Lease Property Fund, says: “There has been much appetite from institutional investors for real estate over the past five years, as they have sought alternative ways to help match liabilities. Investors still have a strong need for inflation-linked, long-term secure income and assets such as long lease property are ideally suited to provide this. By focusing on the occupational area of the sector, the fund is well placed to deliver a higher than average distribution to investors to help them meet their income needs.”
The BlackRock UK Long Lease Property Fund launched in June 2013 and is delivering a distribution yield in excess of five per cent and an average lease term of at least 20 years. Some 96 per cent of income from the fund is inflation-linked, or guaranteed minimum uplifts. The real estate team also has access to BlackRock’s broader research resources in areas such as equities, fixed income and private equity to help inform investment decisions in the fund.