LondonMetric announced that the Metric Income Plus Limited Partnership (“MIPP”), its £150 million joint venture with Universities Superannuation Scheme (“USS”), has exchanged contracts to acquire a portfolio of five standalone Wickes retail warehouse units from clients of Aberdeen Asset Management. The total purchase price of £28.0 million (approx. €33.3 million, net of acquisition costs), reflects an average net initial yield of 7.2%, with an average unexpired lease term of just over ten years.
The five Wickes units are located in Oxford (28,200 ft²), Chatham (24,900 ft²), Maldon (27,000 ft²), Oldham (25,000 ft²) and Barnsley (25,900 ft²).
MIPP will use its £75 million (approx. €89.3 million) loan facility to finance the purchase which will produce an average cash-on-cash return of c. 10% per annum.
Andrew Jones, Chief Executive of LondonMetric, commented:
“This off-market acquisition underlines the strength of our retail relationships both in the investment and occupational market. We are already in detailed discussions with Wickes to materially extend the unexpired lease terms and progress various development initiatives, in partnership with them.
“The acquisition of these units is consistent with MIPP’s robust metrics of full occupancy, long unexpired lease terms and a strong yield on cost of c. 7.25%.”
MIPP was established in November 2011 and has invested £126 million (approx. €150 million, net of acquisition costs) to date in a total of 16 schemes.
Harvey Spack Field advised LondonMetric.