If you’ve ever wondered how Wyevale Garden centres can sustain its spending spree, there’s a clue on the grapevine this week.
WGC has managed to grow its garden centre portfolio to more than 150 through an aggressive acquisition programme funded by the deep pockets of its equity capital owners, Terra Firma.
The interest in acquiring garden centres businesses in the UK is currently intense, with multiple offers chasing each ‘for sale’ announcement. As a result, prices have been pushed up and up, to the delight of their owners, as the buyers with the fattest cheques seal the deals. More often than not, it’s WGC.
But not even Terra Firma’s pockets will be bottomless. After all, the group has a large and diverse portfolio of interests with many calls on its assets and challenging scenarios to face (as browsing the investment press will reveal).
So the news this week that Wyevale Garden Centres has completed £91m worth of sale and leaseback deals on eight garden centres may help to explain how it is still able to buy highly-valued garden centre businesses and pay top dollar for them.
In December 2015 Orchard Street Investment Management bought and leased back Altrincham, Gosforth, Nantwich, Leicester, Huntingdon, Braintree, Woking and Osterley properties on behalf of St James's Place Wealth Management. WGC has signed new 25 year leases on them – and meanwhile has £91m more cash in hand to spend on acquisitions.
Until recently Wyevale held more than 70% of its sites on freehold, but, having seen how much interest was created by last year’s sale of La Salle Investment Management’s £110m Garden Centre Fund (which featured six WGC prime sites, including Bicester Avenue) to Black Rock, it may be sizing up further sale and leaseback as an increasingly attractive route to growth.