LondonMetric has bought a triple-net retail park in south-east London for £38m, with planning for more than 1,000 flats.
The 68,000 sq ft Cantium Retail Park, bought through one of its joint ventures, reflects an initial yield of 5.4%, rising to 5.7% on completion of short-term asset management initiatives. LondonMetric’s share is £19m.
The five-acre site at 520-524, Old Kent Road, SE1, is let to B&Q, Pets at Home and Halfords and has planning for 1,100 flats.
At the same time, LondonMetric extended the WAULT and increased the annual rent by 54% from £1.4m to £2.1m, with 85% of the income subject to contractual rent reviews. Following this the yield is expected to increase to around 7%.
Chief executive Andrew Jones said: “This is an exceptional asset in a prime central London location where the demand for higher value alternative uses more than underpins the purchase price. The simultaneous regears and rental increases demonstrate our strong retailer relationships and high occupier commitment to retain representation in a location where de-retailing is seeing quality retail space lost to alternative uses on an almost unprecedented basis.”
LondonMetric was advised by Cortex Partners; Savills advised the vendor.
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