UK REIT LondonMetric Property is acquiring two tdistribution warehouses in Bedford and Birmingham.
UK REIT LondonMetric Property is acquiring two tdistribution warehouses in Bedford and Birmingham.
The total consideration of £62 mln (€72 mln) reflects a combined net initial yield of 7.2%. The acquisitions will be funded from existing resources.
In Bedford, LondonMetric has exchanged on the Argos Distribution Warehouse for £51.65 mln, reflecting a net initial yield of 7%. The 61,000 m2 scheme is Argos’ key distribution centre in the UK handling its bulky goods home delivery operations. The unexpired lease term is 9.5 years with an open market rent review due in December 2017. Nearby occupiers include Asda and Sainsbury’s.
In Birmingham, LondonMetric has exchanged contracts to acquire the WH Smith Distribution Unit for £10.1 mln, reflecting a net initial yield of 7.9%. The scheme comprises almost 20,000 m2 and is let for 11 years to WH Smith. It is one of three WH Smith distribution warehouses across the UK that supplies its UK High Street and Travel Outlet business.
Following these acquisitions, the LondonMetric retail distribution portfolio comprises five distribution centres with a combined portfolio value of £164.8 mln, representing 14% of the enlarged group portfolio. The weighted average unexpired lease term is 14.9 years with no tenant break options and the portfolio is 100% occupied. Fixed rental uplifts across the distribution portfolio represent 40% of total distribution rental income, and 21% of the group contracted rental income.
Dowley Turner Real Estate advised LondonMetric on Bedford and Burbage Realty advised LondonMetric on Birmingham.
