UK REIT LondonMetric Property is acquiring a distribution centre in London for £56.5mln (€74 mln), reflecting a net initial yield of 5.1%.

UK REIT LondonMetric Property is acquiring a distribution centre in London for £56.5mln (€74 mln), reflecting a net initial yield of 5.1%.

The 38,000 m2 Eddie Stobart distribution facility in Dagenham was acquired from Meaalofa Developments Holdings, a joint venture between Sheikh Holdings and Landid, funded by Longbow.

LondonMetric is funding the acquisition from its existing resources.

The 11-hectare site is let in its entirety to storage and haulage operator Eddie Stobart at a rent of £3 mln per annum for 17 years from August 2014, with annual fixed uplifts of 2% per annum.

The existing five units only cover 34% of the site, and LondonMetric and Eddie Stobart are working on plans to substantially redevelop and reconfigure the site, including the replacement of two existing units with an 11,000 m2 extension to accommodate growth in business.

Following the acquisition, LondonMetric's distribution portfolio totals £611.8 mln, which comprises 22 distribution centres with a weighted average unexpired lease term (WAULT) of 14.8 years, 100% occupancy and with 52.4% of the portfolio subject to fixed uplift or RPI income. The distribution portfolio now represents 46% of the group's portfolio.

LondonMetric was advised by DTRE, and Meaalofa Developments was advised by Savills.