LondonMetric Property Plc has exchanged on the acquisition of the Superdrug Distribution Centre in South Elmsall, Doncaster from OLIM Property Limited acting on behalf of BAE Systems Pension Fund. The purchase price is £13.0 million (approx. €15.8 million) (net of acquisition costs), reflecting a net initial yield of 7.3%. The acquisition is expected to complete in June 2014 and will be funded from existing resources.
The 292,500 ft² (approx. 27,174 m²) distribution center is located along the A1(M) motorway, two miles north west of Junction 38. The unit is fully occupied by Superdrug which has recently re-geared its lease to 2025 with a break in 2020.
The unit caters for all of Superdrug’s online business and is one of only two units in the UK servicing its 900 stores in the UK & Ireland. Adjacent occupiers include Next, Asda and Findlays.
Following this acquisition, the LondonMetric distribution portfolio comprises 11 distribution centers with a combined value of £261.8 million (approx. €317.7 million), representing 25% of the enlarged Group’s portfolio. The weighted average unexpired lease term across the distribution portfolio is 12.8 years (12.1 years to first break) and the portfolio is 99.5% occupied. Fixed rental uplifts across the distribution portfolio represent 47% of total distribution rental income. Across the Group’s investment portfolio fixed rental uplifts represent 34% of contracted rental income.
Andrew Jones, Chief Executive of LondonMetric, commented:
“This attractive acquisition of Superdrug’s distribution center supports our aspiration to grow our retail distribution portfolio, an area where we will continue to commit capital during 2014. We look forward to working with Superdrug to facilitate its growing multi-channel strategy.”
CBRE advised LondonMetric and Jones Lang LaSalle advised OLIM Property Limited.