LONDON (Alliance News) – Property investment and development company LondonMetric Property PLC said on Thursday it has acquired a portfolio of 14 urban and regional logistic warehouses from private equity real estate investment firm Cabot Properties Inc for GBP116.6 million.
The purchase price reflects a yield on cost of 6.1%, and a reversionary yield of 6.6%.
11 of the 14 warehouses are “last mile”, urban logistic warehouses, with half of the portfolio located in the South East and Midlands region of the UK. Last mile refers to the transportation of goods from a warehouse to its final destination in a store, for example.
The 1.3 million square feet portfolio of warehouses as a weighted average unexpired lease term of 5.6 years and is let at a low average rent of GBP5.50 per square foot. 60% of the GBP7.2 million income is derived from retailers and third party logistics operators including postal services company Royal Mail PLC, Unipart Group, Howdens Joinery Group PLC and courier company DHL Express.
“Following recent non-core disposals of Milford Haven, Loughborough and Marlow totalling GBP116.3 million, we are pleased to have re-invested the sale proceeds into the distribution sector within such a quick timescale. The urban logistics market continues to benefit from a highly favourable demand/supply imbalance and this acquisition further increases our critical mass in this sub-sector to over GBP260 million across 38 assets. The acquired portfolio is fully income generating and offers good opportunities to extend lease lengths and capture strong income growth,” said Chief Executive Andrew Jones.
Shares in LondonMetric Property were up 0.2% at 167.40 pence on Thursday.
By Dayo Laniyan; [email protected]
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