LondonMetric Property has bought a portfolio of eight “last-mile” distribution warehouses for £39.9m – a 6.2% yield.
Six of the distribution warehouses have been acquired from Helical for £26m – a 6.5% yield. The 382,000 sq ft of warehouses are in established distribution locations with strong motorway connectivity and severely restricted levels of supply. The portfolio has a WAULT of seven years and is let at a low average rent of £4.71 per sq ft.
LondonMetric has also exchanged on a 53,000 sq ft distribution development in Crawley, West Sussex, for £10.7m at a yield on cost of 5.2%. The development has been prelet to retailer Barker & Stonehouse for 15 years at a rent of £10.77 per sq ft. Practical completion is expected in March 2017.
It has also acquired a 30,000 sq ft distribution warehouse in Bicester, Oxfordshire, for £3.2m – a yield of 5.9%. The warehouse is let to DPD Group with a WAULT of 9.5 years.
Andrew Jones, chief executive of LondonMetric, said: “These are important acquisitions as we continue to build critical mass in the last-mile distribution sector, which now extends to 1.2m sq ft across 19 assets.
“Structural market changes indicate that all these assets are highly reversionary. The demand/supply tension we are seeing for last-mile distribution remains attractive, as reflected in the organic rental growth that we are capturing on our own last-mile assets.”
LondonMetric was advised by Franck-Steier Price Property on the portfolio and by Colliers International on the Bicester deal. Ben Goodberry of Tudor Toone acted for Helical.
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