London & Stamford buys UK distribution portfolio for EUR 242m

AIM-listed real estate investor London & Stamford Property has acquired the Radial portfolio of prime distribution warehouses across the UK for £208.5 mln (EUR 242 mln), exluding costs. The vendor is Warner Estate Joint Ventures Limited and Uberior Ventures Limited.

The Radial portfolio comprises 16 units with 316,000 m² of space in prime locations in the UK. Of the 16 units, 13 are located in the Midlands and one in Scotland, the South East and the South West.

There are 13 tenants in total, including Tesco, Travis Perkins, Eddie Stobart, Kuhne & Nagel and Northrop Grumman. The portfolio has a weighted average unexpired lease term of 6.23 years. The current passing rent of the portfolio is £17.36 mln per annum from 14 of the 16 units. There are currently two vacant units and once fully let the portfolio is expected to produce an annual rental income of £18.91 mln, which equates to a property net initial yield of 8.75%.

The transaction will be financed out of existing cash resources and using the debt available under London & Stamford's existing £150 mln loan facility with Bank of Scotland. This will generate an equity yield of 15.3% initially rising to 18.5% once full letting is achieved.

London & Stamford will hold a 94% interest in Radial, with Anglesea Capital holding the remaining 6%. Anglesea Capital is a distribution sector specialist and will work closely with LSI as asset manager of the portfolio.

M3 and Savills acted for both London & Stamford Property and Anglesea Capital.