US investor Realty Income has bought a £40.9m retail and auto service centre portfolio from LondonMetric.
The deal, which reflected a 5.9% blended net initial yield, comprises six properties with a WAULT of 11 years.
The US REIT bought a 106,000 sq ft retail asset in Leicester let to B&Q, Home Bargains and Smyths Toys. The property generates a rent of £1.8m pa and is let for a further 10 years following a recent regear of the 77,000 sq ft B&Q store.
Realty Income also purchased a 32,000 sq ft Wickes store in Halesowen in the West Midlands, which LondonMetric acquired as part of the Mucklow acquisition, a 15,000 sq ft Aldi supermarket in Hull and three Kwik Fit auto service centres.
The assets have delivered an ungeared IRR of 8% pa. LondonMetric said the sale crystallises a total return on cost of 50% over an average hold period of six years, and that the disposal is at a 7% premium to the last reported book value.
Andrew Jones, chief executive of LondonMetric, said: “These are all very well let assets that have delivered strong performances and their disposal crystallises an attractive surplus to our original purchase prices.
“The transaction is in line with our strategy of allocating further capital into the logistics and convenience grocery sectors.”
Knight Frank advised LondonMetric.
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