UK REIT LondonMetric Property has sold a Morrisons food store in Loughborough to a UK pension fund for £32.5 mln (€38 mln), reflecting a net initial yield of 4.25%.
'The lease regear and extension at Loughborough demonstrates our ability to partner with retailers to create value through our asset management and development capabilities,' commented Andrew Jones, chief executive of LondonMetric.
'This is a very good asset that has generated attractive income and capital returns and the pricing reflects the strong institutional demand for long let income with guaranteed income growth,' Jones added.
LondonMetric acquired the asset for £16.8 mln in 2010 at a net initial yield of 5.72% and recently completed a comprehensive refurbishment and 12,000 ft2 (1115 m2) extension at a cost of £7.9 mln.
Morrisons subsequently entered into a new 25-year lease in January 2017 on the extended 55,000 ft2 (5100 m2) store.
The sale will complete in March 2018 at a price 11% above last reported book value, representing a profit on cost of 26%.
LondonMetric was advised by Wilkinson Williams. Allsop advised the purchaser.
