LondonMetric Property has bought two logistics warehouses for £135.6m – a blended net initial yield of 4.2% and a reversionary yield of 4.8%.
The two properties, bought in separate deals, generate a rent of £6m per annum with 100% of the income benefitting from RPI linked rent reviews. The warehouses have a WAULT of 22 years.
LondonMetric paid £97m for a 700,000 sq ft warehouse let to “a high-quality occupier” for 23 years, at a rent of £4.1m per annum. The price paid reflects a net initial yield of 4%. The highly automated warehouse sits adjacent to a key UK motorway junction on a premier logistics hub, and has further development potential of up to 180,000 sq ft. A rent review is due in three years.
The second asset acquired by the firm is a 296,000 sq ft warehouse on Port One Logistics Park in Ipswich. It was bought for £38.6m – a 4.5% net initial yield – and is prelet to a rapidly expanding e-commerce company on a 20-year lease at a rent of £1.9m a year. Development of the scheme is set to complete in spring 2022.
LondonMetric chief executive Andrew Jones said: “These are excellent buildings in strong locations and offer attractive opportunities to capture guaranteed rental reversions. These investments quickly follow on from the recent sale of our Primark mega logistics warehouse, where the delayed completion on that transaction means that we will continue to collect the income until February next year.”
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