LondonMetric buys and sells €46m of UK warehouses

UK REIT LondonMetric Property has acquired five urban logistics warehouses and sold a regional warehouse in Doncaster for a total of £40.6 mln (€46 mln).

The five urban logistics warehouses were purchased for a combined total of £25.6 mln, reflecting a blended net initial yield of 5.0% which is set to rise to 5.6% over the next five years. The assets have an average lease length of 16 years, with 67% of the income subject to contractual rental uplifts. They are located in Leyton, Weybridge, Peterborough, Cheltenham and Haverhill. The tenants include Clipper Logistics, FedEx and Tesla.

LondonMetric sold a 26,942 m2 regional warehouse let to Superdrug in Doncaster for £15 mln, reflecting a net intial yield of 6.2%. The building is let for a further eight years with three years to break. It was acquired by LondonMetric in 2014 for £13 mln, at a net initial yield of 7.3% and has generated an ungeared IRR of 10% per annum.

Andrew Jones, CEO of LondonMetric, commented: 'The investment market for logistics assets continues to enjoy strong structural support. We have therefore decided to monetise one of our oldest and shortest let regional assets to allow us to focus on growing our urban logistics portfolio, which offers greater certainty of occupation, income and future valuation growth.

'These new investments meet our objective of owning long let assets in strong locations that offer excellent potential for income growth.'


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