The UK's LondonMetric Property has completed the acquisition of a long-let distribution warehouse in Doncaster for £21.2 mln (€25 mln), reflecting a net initial yield (NIY) of 6.3%.
The 264,000 ft2 (24,500 m2) regional logistics warehouse is let to Next for a further 13 years at a rent of £1.42 mln p.a., which equates to £5.37 per ft2.
The lease benefits from annual fixed rental uplifts of 2.5% which will increase the purchase NIY to 7.1% within three years.
Separately, LondonMetric has sold an 18,000 ft2 office investment in Chiswick for £7.4 mln. The multi-let office is 59% occupied with a weighted annual unexpired lease term of 1.5 years and was acquired as part of the A&J Mucklow takeover in 2019.
Andrew Jones, chief executive of LondonMetric, commented: 'As the UK economy reaches an inflection point on both inflation and interest rates, we are increasingly attracted to triple net leased assets that have strong income compounding characteristics and certainty of growth.
'We have continued to successfully exit non-core assets and reinvest into sectors that benefit from structural tailwinds. We have now, based on purchase value, disposed of 39% of the Mucklow portfolio.'
LondonMetric was advised by GV & Co in respect of Doncaster.
