LondonMetric buys UK distribution unit

UK REIT LondonMetric Property has bought the Primark Distribution Unit in Thrapston, England from UK private equity fund manager Moorfield.

The asset was acquired from Moorfield's Real Estate Fund II for £60.5 mln (€92 mln). The acquisition will be funded from existing resources.

The purchase price reflects a net initial yield after purchasers' costs of 6.4% and will show an initial cash return of 11.5% per annum and a geared total return of over 15% per annum.

The scheme is Primark’s central distribution centre for the UK and comprises 785,000 sq ft (73,000 m2) of space, located for national distribution close to major road networks, including the M1.

The unit is fully let to Primark Stores until October 2032 at a rent of £3.9 mln per annum. The lease benefits from annual fixed uplifts of 1.5% and upward-only open market rent reviews every five years.

Following the acquisition, the LondonMetric distribution portfolio comprises 13 assets with a combined value of around £245 mln and a weighted average unexpired lease term of 13.0 years. LondonMetric Property was recently created through the merger of London & Stamford Property and Metric Property Investments,

'The retail distribution sector is continuing to benefit from strong occupier interest as retailers' multi-channel strategies continue to evolve,' said Andrew Jones, chief executive of LondonMetric. 'We regard this as a key area for growth within our core portfolio and aim to capitalise on this dynamic further by leveraging our deep occupier relationships to secure more opportunities.'

Cushman & Wakefield advised LondonMetric. Doherty Baines advised Moorfield Real Estate Fund II.