LondonMetric buys retail warehouses for €30m

LondonMetric Property has agreed to buy a portfolio of two retail warehouses in Cardiff and Milton Keynes from clients of JP Morgan Asset Management for £25.8 mln (€30 mln) net of acquisition costs.

The deal reflects a combined net initial yield of 8% and will be funded from existing resources.

In Milton Keynes, Westcroft Retail Park comprises 75,600 sq ft (7,000 m2) of Open A1 space (including food) across eight units let to tenants including Boots, B&M, McDonalds and KFC. The park is fully occupied with an average unexpired lease term of 6.8 years to expiry and first break.

In Cardiff, Seager Retail Park comprises 33,800 sq ft of bulky goods consented space let to Wren Kitchens, Carpetright and Pets at Home. The park is fully occupied with an average unexpired lease term of 8.3 years (6.5 years to first break).

Following the acquisition, the LondonMetric retail investment portfolio will comprise 35 assets with a combined portfolio value of £384.5 mln, representing 33% of the total portfolio.

The purchase follows the company's £60 mln of retailer distribution acquisitions recently announced in Bedford and Birmingham. 'When combined, these four recent acquisitions represent a total equity investment of £41.3 mln, equating to 61% of the equity released from the distribution portfolio sale announced in June,' said Andrew Jones, Chief Executive of LondonMetric. 'We are reinvesting these proceeds at an average yield of 7.4% capitalising on a yield arbitrage 115bps over our disposal yield and extending our lease term to 10.3 years.'

Edgerley Simpson Howe advised LondonMetric and Yarnold & Partners and Cushman & Wakefield advised the clients of JPMorgan Asset Management.