LaSalle makes first acquisition for 10-year ERAFP mandate

LaSalle Investment Management has made its first investment on behalf of French public service additional pension scheme L’Etablissement de Retraite additionnelle de la Fonction publique (“ERAFP”) after it was awarded an extensive 10-year European investment mandate in Q1 2015.

LaSalle’s first acquisition for ERAFP is a freehold retail block on New Street and Temple Street in Birmingham, United Kingdom let to Tesco and Evans Cycles. It was purchased for GBP14.92m (EUR20.19m) from Green Property on behalf of receivers, representing a net initial yield of 6.6 per cent.

The property is located on a high footfall thoroughfare linking the prime business district with the main entrance to New Street Train Station. Tesco Stores Limited occupies the larger unit for its Metro convenience store format, which has a very prominent return frontage unit trading over ground and first floors with the main entrance onto New Street. The adjoining unit on Temple Street is let to Evans Cycles at a combined rent of GBP1,030,000 per annum and a term of 14.74 years to lease expiries.

Birmingham is one of the top three shopping destinations in the UK and it has benefited from around GBP10 billion (EUR13.86 billion) of inward investment for regeneration in recent years with a further GBP11 billion (EUR15.25 billion) budgeted to be spent in the next ten years.

Beverley Shadbolt, Fund Manager, LaSalle Investment Management, says: “ERAFP is one of the world’s largest public pension funds by members. This first acquisition reflects our strategy for ERAFP to invest in high quality core assets across Europe. It occupies a prime location on Birmingham’s New Street, which is set to benefit from its proximity to the city centre regeneration project including the refurbishment of New Street Station and the opening of Grand Central later in 2015, and is let to retailers with strong covenants.”

Green Property was advised by Doherty Baines and CBRE acted for LaSalle Investment management.