LondonMetric Property Plc has exchanged contracts to develop a 1.06 million ft² (approx. 92,900 m²) retail distribution center on the A14 in Islip, Northamptonshire. The 70 acre site was acquired from Greatline Developments and already has an 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/ft².
The total cost of the development, including the site purchase, is anticipated at £77 million (approx. €93.2 million), 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. Andrew Jones, Chief Executive of LondonMetric, commented: “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.
The distribution market is evolving very quickly with take-up forecast at 50 million ft² over the next five years. We are a partner of choice to many of the UK’s leading operators and look forward to delivering this latest generation distribution center which will materially enhance our existing portfolio and significantly grow our contracted rental income.”