LondonMetric offloads retail and buys urban warehouses

LondonMetric Property has sold some £31m of retail properties and bought £45m of urban warehouses for their rental growth potential. The owner sold seven properties in separate transactions for £31.3m, reflecting a 7% blended net initial yield and a 3% profit over prevailing book values. The properties include £18.3m of non-core LXi REIT assets, transacting at 5% ahead of prevailing book values. The sales include a 106,000 sq ft Asda supermarket in Scotland and former LXi asset for £10.5m, and a 41,000 sq ft retail park in Ipswich, let to Wickes, Topps Tiles, McDonalds and Costa, sold for £10.2m. The business also offloaded two former Cazoo car showrooms in Edinburgh and Cardiff, also former LXi assets, for £6.4m, a B&M shop in Stourbridge in the legacy former Mucklow portfolio for £2.8m, and a former LXi Travelodge hotel and pub for £1.4m. Separately, LondonMetric bought six reversionary urban warehouses for £45m, reflecting a NIY of 6.1% and a reversionary yield of 6.6%. The assets acquired have a WAULT of 7.6 years and include a 106,000 sq ft warehouse in Cardiff let to Booker, a 95,000 sq ft warehouse in Milton Keynes occupied by Ingram Content Group, and a 30,000 sq ft multi-let warehouse in York. It also purchased a 28,000 sq ft multi-let warehouse in Reading and two warehouses totalling 37,000 sq ft in Derby and Huntingdon, acquired through a 15-year sale-and-leaseback with Travis Perkins. Andrew Jones, chief executive at LondonMetric, said that by exiting the non-core assets, the proceeds have been reinvested into “much higher quality assets, which offer superior rental growth potential”. He added: “We are continually looking to upgrade the quality of our portfolio and exit lower growth assets outside of our core sectors or those that do not meet our return criteria. As such, we expect to announce further disposals shortly.”