LondonMetric Property has sold a Morrisons food store in Loughborough, East Midlands, for £32.5m – a 4.25% yield.
The firm acquired the asset for £16.8m in 2010 – a 5.72% yield – and recently completed a comprehensive refurbishment and 12,000 sq ft extension at a cost of £7.9m.
Morrisons subsequently entered into a new 25-year lease in January 2017 on the extended 55,000 sq ft store at an annual rent of £1.5m pa with contractual RPI uplifts.
The sale to a UK pension fund will complete in March 2018 at a price 11% above the last reported book value and crystallises a profit on cost of 26%.
Andrew Jones, chief executive of LondonMetric, said: “The lease regear and extension at Loughborough demonstrates our ability to partner with retailers to create value. The pricing reflects the strong institutional demand for long-let income with guaranteed income growth.”
LondonMetric was advised by Wilkinson Williams; Allsop advised the purchaser.
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