LondonMetric has bought a Tesco.com distribution centre in Croydon from CBRE Global Investors for £21.1m, reflecting a net initial yield of 5.5%.
The 173,000 sq ft facility is located off the A23 Purley Way and is fully occupied by Tesco, which has five years remaining on its lease and pays rent of £6.70 per sq ft.
The deal brings the value of LondonMetric’s distribution portfolio up to £555.3m across 21 facilities with a weighted average unexpired lease term of 14.7 years. The distribution portfolio now represents 44% of the group’s total portfolio.
Andrew Jones, chief executive of LondonMetric, said: “This is a strategically important site in a densely populated part of London that will continue to benefit from the growth in online shopping and convenience retail.
“Increasing occupier demand and limited supply for real estate in this location will allow us to capture the true reversionary potential of the asset at both review and expiry.”
DTRE advised LondonMetric; BNP Paribas advised CBRE Global Investors.
