LondonMetric Property has continued to grow its rental income, earnings and dividends as it continues its path towards “relentless expansion”.
The company’s portfolio value grew by £200m to £6.2bn in the year to 31 March, during which time it also acquired £343m of assets, 87% in logistics, and disposed of £342m – £214m of which were former LXi and CTPT assets acquired during the mergers. Since the year end the company has sold a further £63m.
Earlier this month, the company announced it had some off £61.8m of non-core and mature assets across a range of sectors, which reflected a blended net initial yield of 6.1%.
These included the sale of a multi-storey car park in Yorkshire and four pubs let to Stonegate for £21.7m at a blended net initial yield of 7.7%, as well as a multi-let industrial estate in Crawley for £21.4m at a net initial yield of 5.1%.
Net rental income increased by 123% year-on-year to £390.6m, which, in turn, helped push EPRA earnings up by 120% to £268m – a rise of 20.7% on a per share basis.
Weighted average least length until expiry came in at 18.5 years, with gross to net income ratio coming in at 99% and occupancy at 98% (rising to 99% post-year end).
Occupational activity added £15.3m per annum in contracted income, as the company achieved contractual rental uplifts on 77% of its income, 40% of which is subject to annual reviews. The company expects income to continue to rise by £27m over the next two years, with an 18% embedded reversion on its logistics assets.
Dividend also increased by 17.6% to 12p, 109% covered by earnings, with continued growth of 5.3% to 3p projected for Q1 2026 – Q1 2025 came in at 2.85p, while Q4 came in at 3.3p.
IFRS profits rose to £347.9m from £118.7m in 2024 as the company continued to dispose of former LXi and CTPT assets, pushing the company’s total returns to 9.7% – up from 1.3% in 2024 following the mergers.
The news follows the company’s £698.9m takeover bid for listed peer Urban Logistics REIT, as well as its £44m acquisition of logistics and retail warehousing-focused REIT Highcroft Investments.
Together the acquisitions would take the company’s market capitalisation to £4.4bn and push its portfolio value up to £7.3bn.
Andrew Jones, chief executive of LondonMetric, said the company has “every reason to be optimistic about our relentless expansion and the opportunities available from our highly scalable platform”.
He credited the REIT’s triple net lease model for its rental growth and successful delivery of value to its shareholders, as well as its commitment to “unemotional capital allocation, overhead efficiency and a resolute focus on income and growth”.
“In an environment where scale is essential, our £6bn portfolio is set to grow by a further £1bn through M&A activity, which will add to our urban logistics exposure, our strongest conviction call sector for rental growth,” Jones said.
He added: “With 10 years of dividend progression under our belt, our all-weather portfolio is more capable than ever of delivering reliable, repetitive and growing income, and we remain firmly on track to achieving dividend aristocracy.”
The company’s debt ratio remained stead at 32.7% LTV, with an average debt maturity of 4.7 years and a cost of debt at 4%.
Following £489m of hedging activity, the debt was fully hedged as the company achieved a BBB+ credit rating in the year and broadened its opportunities for future financing.
Image © LondonMetric
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