LondonMetric has bought a 115,000 sq ft urban logistics warehouse in Waltham Cross, Hertfordshire, let to foodservice business Reynolds.
The property was bought for £43.8m through a sale-and-leaseback deal, at a 3.5% net initial yield. Contractual rent reviews are expected to increase this yield to 4% after five years.
The warehouse is leased on a new 23-year term with CPI+1-linked rent reviews of between 2-4%. It generates a rent of £1.6m per annum – just under 10% below market rent. There are no lease incentives included in the deal.
Following the acquisition, LondonMetric’s urban logistics portfolio’s weighting towards London and the South East has increased to more than 50%.
Andrew Jones, chief executive of LondonMetric, said: “We are pleased to be able to redeploy recent sales receipts into such a high quality, well located asset offering the certainty of excellent income growth with the comfort of a high intrinsic site value.
“Assets of this quality seldom become available and we look forward to building on our relationship with Reynolds and welcome them as one of our key customers.”
Stonehill Partners acted for LondonMetric and Strettons acted for Reynolds.
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