LondonMetric announces it has exchanged on the acquisition of Martlesham Heath Retail Park, Ipswich from clients of JPMorgan Asset Management. The purchase price is £10.35 million (approx. €12.25 mln) (net of acquisition costs) reflecting a net initial yield of 6.5%. The acquisition will be funded from existing resources.
The scheme comprises 47,850 ft² (approx. 4,445 m²) across six units, anchored by a new 15,000 ft² (approx. 1,400 m²) M&S Simply Food. There is a 5,000 ft² (approx. 465 m²) vacant unit where letting negotiations are at an advanced stage. On conclusion of this letting the yield will rise to 7.4%.
The recent M&S letting was agreed at £25/ft² compared to an average rent on the park of £12/ft² prior to M&S joining. The weighted average unexpired lease term is 11.2 years and occupancy by income is 86%.
Following the acquisition at Ipswich, the LondonMetric retail investment portfolio will comprise 32 assets with a combined value of circa £345 million (approx. €408.2 mln), representing 32% of the enlarged LondonMetric portfolio. The retail portfolio’s occupancy is 98%, with an average passing rent of £16.20/ft² and a long weighted average unexpired lease term of 11.0 years (10.2 years to first break).
Separately, at its shopping park development in St Austell, Cornwall, LondonMetric has exchanged terms with M&S for a new 50,000 ft² (approx. 4,645 m²) full-line general merchandise store incorporating Simply Food. A planning application for the entire 158,000 ft² (approx. 14,680 m²) proposed development has been submitted and is expected to be determined later this year. The scheme is also anchored by a 68,000 ft² (approx. 6,320 m²) Sainsbury food store.
Andrew Jones, Chief Executive of LondonMetric, commented: “Our acquisition at Ipswich provides an opportunity to leverage on the recent letting to M&S and gives us a platform to materially improve the tenant mix, grow income and increase the rental tone.
“Our St Austell development now benefits from two strong pre-lettings to both Sainsbury’s and M&S, and we remain confident of bringing more new retailers to St Austell.” At Ipswich Edgerley Simpson Howe advised LondonMetric and Yarnold & Partners advised the clients of JPMorgan Asset Management.
Source: FTI Consulting
