REIT Londonmetric has concluded two seperate warehouse deals in the UK representing a combined investment of £58 mln (€68 mln).
The transactions include a portfolio of 'last mile' distribution warehouses, for a total consideration of £40 mln, and two retail warehouses, worth £18.4 mln, which were purchased for its Metric Income Plus Limited Partnership (MIPP), its joint venture with Universities Superannuation Scheme (USS).
Six of the distribution warehouses were bought from Helical for £26 mln at a net initial yield of 6.5%. LondonMetric has also exchanged on a 4,924 m2 distribution development in Crawley for £10.7 mln at a yield on cost of 5.2%, and a 2,790 m2 distribution warehouse in Bicester for £3.2 mln at a net initial yield of 5.9%.
'These are important acquisitions as we continue to build critical mass within the 'last mile' distribution sector, which now extends to 19 assets across 1.2 million square foot,' commented Andrew Jones, chief executive of LondonMetric.
'Structural market changes indicate that all these assets are highly reversionary. The demand/supply tension we are seeing for 'last mile' distribution remains attractive as reflected in the organic rental growth that we are capturing on our own 'last mile' assets.'
The two retail warehouses comprise a B&Q warehouse in Hull and a Wickes warehouse in Dartford acquired for a total cost of £18.4 mln, reflecting a blended NIY of 6.8%. The vendors were Stobart Group and Roebuck Asset Management, plus a private investor.
'These are two strong income producing assets, let off an average lease term of over 15 years, generating an income return on equity in excess of 10%,' said Jones. 'Both assets trade well and these transactions demonstrate our strong occupier relationships to source attractive off-market opportunities, in both the retail and logistics sector."
LondonMetric was advised by Franck-Steier Price Property on the Helical deal and by Colliers on Bicester.
MIPP was advised by Knight Frank on the retail warehouse deals and also by Beaton Associates on Dartford. Edgerley Simpson Howe represented Stobart and Roebuck.
