LondonMetric Property has bought Savills IM UK Income and Growth fund in a £122m corporate deal.
The acquisition price for the portfolio of 15 assets, reflects a blended yield on cost of 4.3% and an anticipated reversionary yield of 4.9%.
The 15 properties total 482,000 sq ft, with 75% in urban logistics and the remainder comprising long-income assets. Three quarters of the assets are located in London and South East, with key locations including Croydon, Farnborough, Hounslow, Greenwich, Guildford, Maidstone and Stevenage. A further 12% of the portfolio is located in the Midlands.
The portfolio has a WAULT of 11 years (9.2 years to first break) and produces an annual rent of £5.35m, with 43% of the income having contractual uplifts.
LondonMetric said the portfolio, which is let to tenants including Decora, Fujitsu, Grafton, HSBC, Iveco, MKM and Volkswagen, was under-rented and offered “attractive reversionary potential and further asset management opportunities”.
Andrew Jones, chief executive of LondonMetric, said: “Following our equity placing last month, we are pleased to have quickly invested a substantial proportion of the proceeds into this high-quality portfolio. Reflecting their London and South East weighting, we expect these assets will continue to perform strongly as high occupier demand and diminishing warehouse supply drive rental growth higher.”
Jamie Pearson, fund manager at Savills Investment Management, added: “This portfolio has been carefully constructed on behalf of our investors. Our early move to create a portfolio dominated by high-quality London and South East industrial assets has consistently delivered benchmark-beating returns and, ultimately, a favourable exit for our investors.”
LondonMetric was advised by Springer Nicolas and Knight Frank; Savills acted for Savills IM.
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