Real estate investment group EQT Exeter has acquired a distribution warehouse in Northamptonshire occupied by Primark from UK warehouse specialist LondonMetric Property for £102 mln (€120 mln).
The deal represents a net initial yield (NIY) of 4.1%.
Situated in Thrapston, the 785,000 ft2 (73,000 m2) warehouse is let to Primark for another 11 years at an annual rent of £4.4 mln. LondonMetric acquired the property in 2013 for £60.5 mln, reflecting a NIY of 6.4%. Since acquisition, it has delivered a total return of 123% and an ungeared initial rate of return of 12%.
Andrew Jones, chief executive of LondonMetric, commented: 'This is a very good asset that has performed strongly, delivering a total return of £76 mln since acquisition. The sale price achieved reflects a very competitive bidding process and highlights the depth of demand for well let logistics assets delivering reliable, repetitive and growing income.'
Completion of the sale will take place in February 2022, generating an additional £2.2 mln of income. Total proceeds are 8% above the 31 March 2021 book value, according to LondonMetric.
LondonMetric retains its other Primark logistics warehouse which totals 1.1 million ft2 and is let for a further 19 years. On completion of the sale, the portfolio's weighting towards mega distribution will fall from 13% to 10% and its rental income exposure to Primark will fall from 8% to under 5%.
LondonMetric was advised by Knight Frank. The purchaser was advised by DTRE.
