LondonMetric’s portfolio has grown by £1bn over the past year, as “many years of forward planning” pays off.
The last-mile-heavy FTSE 250 REIT said it made total property returns of 28% and capital returns of 23% as EPRA earnings reached £93.5m. IFRS profit was up 185% to £734.5m, with an accounting return of 41.9%.
The portfolio, which now stands at £3.6bn, has benefitted from a 26.5% capital return from logistics. Net tangible assets are £2.56bn, up from £1.73bn in 2021.
Chief executive Andrew Jones said: “Our strong set of results continues to reflect the many years of forward planning that has seen us pivot into assets that benefit from the structural shifts. After all, the macro is far more important than the micro.”
But he said he had few fears of the macro issues that were currently causing concern. “Despite the uncertain global backdrop, demand for warehousing remains both broad and deep, with online operations competing with businesses which are reacting to global trade disruptions by onshoring more of their operations and building up inventories to avoid being caught out by supply disruption. Previously we have talked about globalisation and just-in-time. Today it’s increasingly about localisation and just-in-case.”
Over the year LondonMetric has increased its distribution weighting to 74.6%, with urban logistics at 43.9%. Urban logistics now accounts for £1.6bn of the portfolio, up from £1bn a year ago.
“Our investment thesis is focused on owning strong assets, in the winning sectors and in the best geographies,” said Jones. “This has seen us significantly increase our weighting to urban logistics, our strongest conviction sector call. Falling supply, coupled with rising demand from acceleration in online shopping, growing customer expectations and the arrival of new industries such as q-commerce and dark kitchens, is underpinning unrivalled rental growth.”
The REIT has made £575m of acquisitions over the year, along with £208m of disposals, with a further £43m bought post year-end and £86m sold, at a 14% premium to book value.
Asset management added a further £10.5m to rental income, which grew from £123m to £133m.
The REIT’s LTV stands at 28.8% with average debt maturity of 6.5 years and cost of debt at 2.6%. It completed a £175m equity placing during the year, while refinancing £780m of debt and signing a new £150m loan facility.
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