LondonMetric Property has exchanged contracts to develop a 1.06 million sq ft (93,000 m2) retail distribution centre in the UK's East Midlands.
LondonMetric Property has exchanged contracts to develop a 1.06 million sq ft (93,000 m2) retail distribution centre in the UK's East Midlands.
Located on the A14 motorway near the village of Islip, the 70-acre site was acquired from Greatline Developments and already has outline planning consent.
Construction of the main works is expected to commence late summer with practical completion targeted for summer 2015.
LondonMetric has exchanged contracts to let the development in its entirety to a Top 25 retailer on a new 25-year lease at an initial rent of £5 per sq ft. The total cost of the development, including the site purchase, is anticipated at £77 mln, reflecting a yield on cost of 6.9%.
Following completion of the development, LondonMetric's distribution assets will increase to 33% of its property portfolio, by value.
'This is one of the UK's largest ever pre-let developments and an integral part of our strategy to deliver well let short cycle developments in partnership with our key operators,' said Andrew Jones, chief executive of LondonMetric. 'The distribution market is evolving very quickly with take-up forecast at 50 million sq ft over the next five years.'
CBRE advised LondonMetric on the site acquisition.