The garden centre market continues to be very active on the property front with a marked increase in demand across the

country. As the leading provider of garden centre property services, Gilbert Evans continues to be appointed on the majority of the UK’s most significant garden centre transactions. We have been entrusted by a wide range of clients with over £75 million of transactions in the last 12 months alone. This track record has enabled us to build a deep knowledge base of the market. We welcome this opportunity to share our insight into property matters and demonstrate how we can reduce complexity and help maximise the value of garden centre property assets.

The return of the Garden Centre Group (TGCG) to the garden centre acquisition market has undoubtedly been, in property terms, the most significant change to the market over the last year.

We provided TGCG and its owner, Terra Firma, with acquisition advice in the lead up to its successful acquisition of the £40 million-turnover Garden & Leisure Group. Kevin Bradshaw, TGCG’s Chief Executive Officer, confirmed to us:

“The Garden Centre Group continues to look for good quality garden centres to acquire and integrate to the Group. We are able to offer swift and straightforward transactions for those seeking the benefits and further investment available from being part of the UK’s largest chain of garden centres.”

An appetite to expand is shared by larger independents as well.

In October last year we brokered Blue Diamond’s acquisition of the South Devon-based independent garden centre, Fermoy’s.

Alan Roper, Blue Diamond’s managing director, has confirmed the company’s on-going desire to expand and how it will

consider a range of approaches to achieve its growth ambitions. He told us: “Blue Diamond wants to continue expanding. We are able to be very flexible and will consider freehold or leasehold businesses and even joint ventures.”

For smaller garden centres, demand for sites is less pronounced. This sector of the market is more

price sensitive and inevitably the sales process is more protracted. However, opportunities do exist and we would

advise that owners/operators plan ahead if they are considering selling their business within the next three years.

In this April issue:• Introduction - a marked increase in

garden centre demand• Market overview - significant activity

across all levels• Are values holding up?• Case study: Maximising

opportunities through leasing

Retail & Garden Centre property consultants

Market overview – significant activity across all levels of the market

GARDEN CENTREPROPERTY MATTERS

Gilbert Evans is the sole preferred supplier of property advice to the HTA. Members can contact us via gardencentres@hta.co.uk

Are values holding up?

Demand from all of the garden centre groups continues to strengthen the market, with values being underpinned accordingly. This is particularly relevant to the £2 million plus turnover centres. Limited opportunities and competition between the groups is such that strong values are being achieved. Despite one or two isolated ambitious bids, there are few examples of purchasers being persuaded to ‘overpay’.

For smaller garden centres, below £1.5 million turnover, demand is less pronounced. The groups are less likely to look at this level of the sector unless potential is exceptional or else the location/opportunity provides a distinct trade advantage. At this end of the sector, the banks are still proving to be a hurdle to some transactions completing, leading to more creative solutions being considered by some vendors – along the lines of lease-purchase agreements. Loan to value ratios have tightened, and the banks insistence on relying on valuers without market experience continues to frustrate transactions.

The level of demand begs the questions if, and at what stage, will we see premium prices paid for the remaining groups. Leasing and/or sale and leasebacks are still proving an attractive solution to those groups seeking to increase market share whilst at the same time limiting their gearing.

Technical notes on a range of property subjects are normally available from our website. Whilst our website is being refreshed, please let us know if you are interested in receiving written advice on topics such as Valuations.

• Greenfield development

• Maximising Value

Case Study: Maximising opportunities through leasing

Fermoy’s Garden Centre is one of the best garden centres in the South West. With a strong horticultural base, and being one of the first garden centres to have a specialist butcher and delicatessen offer, the garden centre attracts local and regional customers as well as benefiting from a strong tourist trade.

Gilbert Evans was approached by owners Richard and Mike Ford to advise them on the opportunity for maximising long-term value by way of redevelopment. Working closely with architects and planners it became apparent that site constraints favoured a full redevelopment compared with a piecemeal partial development solution.

Once we had completed site appraisals and valuations and taken into account our clients’ personal and business aspirations, our advice was that to maximise value a planning application should be submitted for a sensitive redevelopment. At the same time consideration was given to investment values versus occupational values.

Blue Diamond expressed an interest in taking over the business of Fermoy’s Garden Centre, allowing Richard and Mike Ford to retain the freehold investment and drive the redevelopment forwards. Gilbert Evans worked closely with Blue Diamond and Richard and Mike Ford to achieve a mutually beneficial leasehold arrangement which should maximise value for both parties.

For confidential and expert garden centre property advice, please contact the partners: Mike Gilbert on 01344 636386

or mgilbert@gilbertevans.com and Allen Evans on 01344 636446 or aevans@gilbertevans.com

Garden Store Group Sale of group of 6 garden centres to Hillview Group

Notcutts Purchase of Garden Pride Garden Centre, Sussex

Secretts Garden Centre, Surrey Sale to Squire’s Garden Centres

Fermoy’s Garden Centre, Devon Leasehold acquisition by Blue Diamond

The Garden Centre Group, Terra Firma Acquisition advice on purchase of £40 million-turnover Garden & Leisure Group

Shepperton Garden Centre, Middlesex Let on behalf of Coldunnel Properties to Longacres

Creative Gardens Acquisition of Galgorm Garden Centre, Northern Ireland

Barton Grange Sale of Bolton Garden Centre to The Garden Centre Group

Summerseat Garden Centre Acquisition of Stephen H Smith Bolton Garden Centre, West Yorkshire

Highgrove Garden Centre Leased to Millbrook Garden Company Limited

Whiteleys Garden Centre, West Yorkshire £2 million-turnover centre sold on behalf of administrator

Bradmore Garden Centre, Nottinghamshire Sale to QD Stores Limited

Gilbert Evans - still leading the market - £75m+ transactions in the last 12 months:

Technical Notes

Next Issue