LondonMetric sells UK warehouse portfolios at 5.9% yield

UK REIT LondonMetric Property has sold four distribution and two industrial warehouses in the latest in a series of transactions. The six assets were divested for a total of £36 mln (€41 mln), reflecting a blended net initial yield of 5.9%.

The assets have been sold to London-listed Pacific Industrial & Logistics REIT in two portfolios and the sale is conditional on completion of its recently announced fundraising. 

The properties are amongst the oldest within the LondonMetric portfolio and are located in the Midlands and North of England, with a weighed average unexpired least term or WAULT to first break of 5.3 years.

Five of the assets were acquired in portfolio transactions over the past three years. The sixth property is a legacy industrial asset that has recently been refurbished and re-geared. The transaction crystallises a £5.3 mln profit and generates an ungeared IRR of 15% per annum.

Off-market sale
Portfolio 1 consists of three warehouses valued at £19.5 mln, reflecting a NIY of 6%. Portfolio 2 consist of three warehouses and a plot of land with a combined value of £16.5 million, reflecting a NIY of 5.8%.

Completion of the disposals have been delayed by three and five months respectively, allowing LondonMetric to continue to receive £700,000 of additional rent.

Andrew Jones, CEO of LondonMetric, commented: 'As evidenced by our recent acquisitions we remain focussed on growing our logistics exposure, however we will always react to attractive off-market approaches which offer our shareholders superior value. This transaction monetises our older and shorter let distribution assets in geographies where we believe rental growth is less certain.'

'Even though our portfolio is in good shape, some regular activity will ensure that it remains fit for purpose.'


Latest news

Best read stories