Metric Property Investments has exchanged contracts to acquire Damolly Retail Park, Newry, Northern Ireland for an initial payment of £28.4 mln (EUR 34 mln). The vendor is private property firm Corbo.
Metric Property Investments has exchanged contracts to acquire Damolly Retail Park, Newry, Northern Ireland for an initial payment of £28.4 mln (EUR 34 mln). The vendor is private property firm Corbo.
This is the first acquisition by the newly incorporated UK specialist retail real estate investment trust (REIT) following its £190 mln flotation on the London Stock Exchange in March 2010. The investment volume reflects a net initial yield of 6.25%. Metric said that it will use its existing cash resources to fund the purchase.
The retail park comprises almost 150,000 square foot (14,000 m2) of retail space arranged across nine units let to a range of tenants including B&Q, Smyths Toys, Carpetright, Next and Currys at a low average rental of £12.70 per square foot.
The park has a restricted Open A1 planning consent and is currently 93% let by income with an average unexpired lease term of 14.3 years. Metric has also acquired an adjoining development site with outline planning consent for a 14,000 square foot supermarket. Potential further top-up payments of £6.5 mln will be due to the vendor once the vacant units have been let.
Andrew Jones, CEO of Metric, commented: 'This acquisition satisfies the key investment criteria we set out at the time of the IPO, of acquiring well-let retail investments off low rents and where our retail customers trade successfully. High occupier contentment is the key to growing rents and exploiting the arbitrage between current income and sustainable rents.
'The park is let off low rents to a high-quality line-up of tenants where we believe that we can extract further value by leveraging our core asset management skills to increase income, develop out the vacant land as well as look to widen the existing planning consent and further improve the tenant mix.'
Wilkinson Williams advised Metric Property Investments. Osborne King advised Corbo.