Metric Property Investments plc (Metric), the UK specialist REIT, announces that on behalf of Metric Income Plus Limited Partnership (MIPP), the £150 million (approx. €184 million) joint venture between Metric and Universities Superannuation Scheme (USS), Metric has acquired two properties for £9.8 million (approx. €12 million) 'net of acquisition costs', reflecting an average net initial yield of 7.0%. MIPP will use its £75 million (approx. €92 million) loan facility to finance the purchase. This will produce a blended cash-on-cash return of 10.2%.
At Haverhill, Metric has exchanged on its acquisition of the Cambridge Road B&Q and Halfords from LaSalle UK Ventures for £5.9 million (approx. €7.2 million) 'net of acquisition costs', reflecting a net initial yield of 6.75%.
The 39,000 ft² park is anchored by B&Q (35,100 ft²) and Halfords (3,900 ft²). The average unexpired lease term is 15 years and the average passing rent is a low £10.80 (approx. €13.2) psf.
At Nottingham, Metric has completed on the acquisition of a 23,600 ft² Wickes unit for £3.9 million (approx. €4.7 million) 'net of acquisition costs', reflecting a net initial yield of 7.3%.
As part of the transaction, Metric has simultaneously agreed terms with Wickes to extend its lease from seven years unexpired to 18 years term certain and negotiated a fixed minimum rental uplift in December 2014, increasing the yield on cost from 7.3% to 7.4%. The average passing rent is £14.65 psf (€18).
Andrew Jones, Chief Executive of Metric, commented: "At Haverhill, the low average passing rent is among the lowest across B&Q's portfolio and provides a solid base for rental growth. Nottingham represents a further retail partnering deal where we have been able to work closely with Wickes to deliver an enhanced unit and at the same time improve the unexpired lease term by 11 years. The MIPP portfolio continues to evolve and we remain on target to be fully invested in one years' time. The portfolio has strong covenants and 34% of the portfolio's income benefits from RPI/fixed uplifts. The addition of Haverhill and Nottingham provide further income diversification and strong trading platforms."
MIPP was established in November 2011 and has invested £81 million (approx. €99 million) 'net of acquisition costs' to date in a total of nine schemes, reflecting a yield on cost of 7.2%. Rents across the MIPP portfolio average £14.80 (€18.2) psf with an average unexpired lease term of 16 years. The portfolio is fully occupied.
Bidwells advised Metric and Lewis & Partners advised LaSalle UK Ventures on Haverhill. Harvey Spack Field advised Metric on Nottingham.