UK real estate investment trust LondonMetric Property has acquired a £51.1m (€58m) portfolio and completed £22m worth of sales.
The £51.1m portfolio consists of a logistics warehouse let to UPS at East Midlands Airport (EMA) and a hotel at Manchester Airport.
The assets are let on long leases with a weighted-average expired lease term (WAULT) to first break of over 100 years and generate £2.2m of annual rent, below market rent of £8.2m a year, according to LondonMetric, with a running yield of 5% over the next few years.
LondonMetric said the automated 450,000sqft airside logistics facility at EMA is let to UPS at a rent of £1.16m a year (£2.60 per sq ft) with CPI linked reviews. Developed by UPS at its own cost, the facility is its second largest cargo facility in Europe and its primary gateway in the UK.
The Clayton Hotel at Manchester Airport totals 365 rooms and generates £1.07m of annual rent pa with RPI linked reviews. The hotel performs strongly due to its airport proximity, and the tenant recently secured planning consent to build a 214-bed extension, LondonMetric added.
The £22.1m of disposals consist of five former Urban Logistics REIT assets sold at a blended net initial yield of 5.4% and 5% above acquisition price. They comprise an urban warehouse in Redditch and a portfolio of four industrial open storage assets in Telford, Sheffield, Leigh and Northampton let primarily to XPO and DX.
Andrew Jones, CEO of LondonMetric, said: “We have continued to monetise assets acquired through takeovers and have now sold eight Urban Logistics REIT assets at strong prices, reflecting the ongoing demand for smaller lot sizes.
“The proceeds from these and previous sales have been successfully reinvested into high quality, [triple-net-lease] and mission critical assets which are strongly underpinned by significant reversion and materially higher values achievable on vacant possession.”
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