LondonMetric Property has announced two acquisitions for a total of £72.9 mln (€81 mln).
Through a £62.0 mln sale-and-leaseback, LondonMetric has acquired a portfolio of five food stores let to supermarket chain Waitrose on new 20-year leases (break at 15 years) with inflation-linked rent reviews.
Located in Keynsham, Malmesbury, Paddock Wood, Towcester and Yateley, the stores range in size from 27,000 sq ft to 43,000 sq ft and also operate as online fulfilment centres for both Waitrose and department store chain John Lewis.
LondonMetric has also purchased a 32,000 sq ft urban logistics unit in Walthamstow for £10.9 mln let to online retailer Ocado. The property is a prime unit located on a two-acre site with low site density. It is let for a further 8 years and the passing rent is 20-25% below market rent with an open market review in 2023 expected to capture significant rental reversion.
Together, these assets generate a total rent of £3.34 mln per annum, reflecting a blended net initial yield of 4.3% and a reversionary yield of 5.0%.
‘We live in a world of continuing disruption which is exposing both winning and losing strategies almost on a daily basis,’ said Andrew Jones, chief executive of LondonMetric. ‘These are high quality and well located assets in structurally supported sectors, let to strong occupiers that offer secure triple net income and the certainty of income growth. These investments will increase our exposure further to the winning sectors and occupiers, with Waitrose now a top ten occupier and Ocado a new addition to our customer base. In a macro environment characterised by zero interest rates, well let properties are becoming increasingly sought after.’
Following LondonMetric’s other long income acquisitions announced earlier in the month, the firm has now invested £83 mln of the £120 mln raised in its equity placing.
LondonMetric was advised by Bruce Gillingham Pollard on the sale and lease back portfolio and by Stonehill Partners on Walthamstow.
