LondonMetric Property has announced the acquisition of a well located urban logistics warehouse in Waltham Cross, in the UK, for £43.8 mln (€51 mln) through a sale and lease back transaction.
The 115,000 sq ft (10,680 m2) warehouse is let to Reynolds, a national foodservice business, on a new 23 year lease with the benefit of CPI+1 linked rent reviews of between 2-4%. The building occupies a 5.6 acre site and has a site cover of 41%, which is low for a London location.
The property generates a rent of £1.6 mln per annum which is just under 10% below market rent. There are no lease incentives as part of the sale and leaseback and the contractual rent reviews will increase the purchase net initial yield from 3.5% to an expected 4.0% after five years.
The purchase price is nearly 100% underwritten by the residual value of the land which reflects the very strong geography of the asset. Following the acquisition, LondonMetric’s urban logistics portfolio’s weighting towards London and the South East has increased to over 50%.
Stonehill Partners acted for LondonMetric and Strettons acted for Reynolds.
