LondonMetric has acquired a 298,000 sq ft distribution warehouse in Bognor Regis on the south coast, for £17.8m.
The sale price reflects a net initial yield of 9%. It is let for two years at a rent of £1.7m per annum to NYSE-listed research and education firm John Wiley & Sons.
The business has signed a 15-year reversionary lease commencing at 2021, at a rent of £2m per annum, equating to £6.50 per sq ft. lt includes break options in 2026 and 2031.
LondonMetric will fund £1.4m of improvement works to the building, delivering an initial yield on cost of 8.6%, rising to 9.6% in 2021 when the new lease begins.
Andrew Jones, chief executive of LondonMetric, said: “This acquisition offers a highly attractive yield and the opportunity to leverage our occupier relationship to deliver significantly greater certainty of income and income growth, as well as further improving the granularity of our income. It is a strong macro location with high intrinsic land values providing future optionality.”
AHBN advised LondonMetric and the overseas seller was advised by BNP Paribas Real Estate.
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