LondonMetric Property has announced the acquisition of Savills IM UK Income and Growth Fund in a corporate transaction valued at £122.2 mln (€144 mln), reflecting a blended yield on cost of 4.3% and an anticipated reversionary yield of 4.9%.
The Fund owns a portfolio of 15 assets across 482,000 sq ft (44,800 m2) with 75% in urban logistics and the remainder comprising long income assets. 74% of the assets are located in London and South East with key locations including Croydon, Farnborough, Hounslow, Greenwich, Guildford, Maidstone and Stevenage. A further 12% of the portfolio is located in the Midlands.
The portfolio has a WAULT of 11.0 years (9.2 years to first break) and key occupiers include Decora, Fujitsu, Grafton, HSBC, Iveco, MKM and Volkswagen. It generates £5.35 mln of rent per annum with 43% of the income benefitting from contractual uplifts. The assets are under rented and offer attractive reversionary potential and further asset management opportunities.
Andrew Jones, Chief Executive of LondonMetric, commented: ‘Following our equity placing last month, we are pleased to have quickly invested a substantial proportion of the proceeds into this high quality portfolio. Reflecting their London & South East weighting, we expect these assets will continue to perform strongly as high occupier demand and diminishing warehouse supply drive rental growth higher.’
‘This portfolio has been carefully constructed on behalf of our investors,’ said Jamie Pearson, Savills Investment Management. ‘Our early move to create a portfolio dominated by high quality London & South East Industrial assets has consistently delivered benchmark beating returns and ultimately a favourable exit for our investors.’
LondonMetric was advised by Springer Nicolas and Knight Frank. The Fund was advised by Savills Capital Advisors.
