LondonMetric Property has sold two big-box warehouses and two regional distribution warehouses for a combined £145.3m.
The sale price reflects a 2.6% discount to the assets’ combined book value at the end of September.
The assets sold include a 726,000 sq ft warehouse in Newark to an international investor for £80.8m, reflecting a net initial yield of 5.1%. It is let to Dixons Carphone for a further 14 years at a rent of £6 per sq ft. LondonMetric bought the asset in 2014 for £68.5m.
In Doncaster, two distribution assets, acquired in 2013 in joint venture with DFS for £16.6m, have been sold to an overseas buyer for £51.2m, reflecting a net initial yield of 6.2%. One, a 330,000 sq ft warehouse, is let to Next for a further four years at a rent of £6.60 per sq ft, while the other, a 176,000 sq ft warehouse, is let to DFS for a further 10 years at a rent of £7 per sq ft.
LondonMetric has also sold a 152,000 sq ft warehouse in Rotherham to a global investor for £13.3m at a net initial yield of 5%. The warehouse was acquired in 2014 for £10.3m and is let to the Royal Mail for a further eight years at a rent of £4.70 per sq ft.
In addition, LondonMetric announced the sale of a further four properties, which have a WAULT of 10 years and generate a rent of £8.3m pa (LondonMetric share), of which £3.9m is subject to delayed completion until June 2020. The assets have delivered ungeared IRRs of between 8% to 10% since purchase.
Following the sales, LondonMetric’s big-box warehousing will represent 14% of its portfolio, across three assets. Income exposure from Dixons Carphone will fall significantly from 6.3% to 3% and DFS’s exposure reduces from 5.4% to 4.3%.
On a pro forma basis, these sales reduce LondonMetric’s loan-to-value ratio to 35%, from 38% at 30 September.
Andrew Jones, chief executive of LondonMetric, said: “We have taken the opportunity to respond to global investor demand for distribution warehousing to monetise some of our larger assets in geographies where we expect income growth to be more muted. The sales further improve the income diversification of our largest occupiers and provides headroom to invest further into urban logistics, which continues to offer superior income growth prospects.”
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