LondonMetric sells UK retail parks for 5.7% yield

UK REIT LondonMetric Property has sold its Westcroft retail park in Milton Keynes for £27.2 mln (€37 mln) and its Mountbatten retail park in Southampton for £16.2 mln, reflecting a blended net initial yield of 5.7%.

Westcroft was purchased by a large UK institutional investor while Mountbatten was bought by CBRE Global Investors, on behalf of a separate account client.

The 77,000 sq ft (7,150 m2) Westcroft retail park was purchased by LondonMetric in August 2013 reflecting a yield on cost of 7.2%.

Mountbatten retail park was purchased in February 2013 as part of a larger portfolio off a net initial yield of over 9%. LondonMetric has repositioned the 52,000 sq ft scheme with four occupier transactions. The asset is leased with an unexpired term of 11.7 years.

LondonMetric said the disposals crystallise a geared IRR in excess of 30%.

Edgerley Simpson Howe advised LondonMetric on Milton Keynes.