LondonMetric Property has become the latest real estate firm to hit the equity markets for fresh capital, announcing plans to raise £100m through a share sale to help fund acquisitions.
Confirming the deal, LondonMetric said that current macroeconomic conditions were “highly supportive for the right real estate that can generate long and strong income” and that the new funding will let it fund a pipeline of acquisitions in urban logistics and long income.
“These uncertain times are starting to give rise to quality investment opportunities that are seldom available in a normalised market,” said chief executive Andrew Jones. “Through our occupier relationships we have identified some excellent assets, at attractive pricing, which would further strengthen our portfolio’s long-term income characteristics. Not only do we expect to see further opportunities arise but also we expect the pitch to be much less crowded than before.”
The company is lining up several deals that it says would see it spend the fundraising proceeds within three months. These include the purchase of a £60m portfolio that features a sale-and-leaseback agreement with an online operator. A further £10m is likely to be spent on a London sale-and-leaseback portfolio, while £30m is earmarked for various other purchases under discussion.
The investor expects to issue 56m new shares, or about 6.7% of its issued share capital, in a deal run by JP Morgan and Peel Hunt.
In a separate trading update ahead of its full-year results on 10 June, the company said EPRA earnings per share for the year to 31 March stood at 9.3p, up from 8.8p a year earlier and driven by a 24% rise in net rental income to £116m.
EPRA NAV was down from 175p to 172p owing to costs of the company’s acquisition of A&J Mucklow. The portfolio value was 0.5% lower than a year ago at £2.34bn.
The company has collected or is collecting monthly 92% of rental payments due by 1 April. It has agreed short-term concessions on a further 4% and deferrals on 3%. It has also confirmed a quarterly dividend of 2.3p.
In response to the Covid-19 crisis, the company is providing property rent-free to occupiers providing essential services to the NHS, and its directors have taken 20% cuts to salaries to help the company’s charity work.
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