LondonMetric Property has exchanged contracts to develop a 1.1m sq ft retail distribution centre in Islip, Northamptonshire.
The 70-acre site was bought from Greatline Developments and already has an outline planning consent.
LondonMetric has exchanged contracts to let the development in its entirety to a top 25 retailer, on a new 25-year lease at an initial rent of £5 per sq ft. The total cost of the development, including the site purchase, is anticipated to be £77m – reflecting a 6.9% yield on cost.
Construction of the main works is expected to start late summer with practical completion targeted for summer 2015. Following completion of the development, LondonMetric’s distribution assets will increase to 33% of its property portfolio, by value.
Chief executive Andrew Jones said: “This is one of the UK’s largest ever prelet developments and an integral part of our strategy to deliver well let short cycle developments in partnership with our key operators. The distribution market is evolving very quickly with take-up forecast at 50m sq ft over the next five years. We are a partner of choice to many of the UK’s leading operators and look forward to delivering this latest generation distribution centre which will materially enhance our existing portfolio and significantly grow our contracted rental income.”
CBRE advised LondonMetric.
annabel.dixon@estatesgazette.com
