LondonMetric Property Plc has announced their acquisition of a 230,000ft² distribution warehouse for £28.8m (€41m), reflecting a NIY of 5.8% and an equivalent yield of 6.4%.
The warehouse is situated in a prime distribution location on an 11.5 acre site in Reading, next to Junction 11 of the M4, and in close proximity to Tesco’s 1 million ft² (92,900m²) regional hub. Other companies nearby include Royal Mail and Proctor & Gamble.
The building is let to DHL for a further 10 years at a rent of £1.8m/year (€2.6m/year), equating to £7.73/ft² (€118.79/m²), with an open market rent review due in July 2020.
The acquisition is from a private vendor and will be funded from LondonMetric’s existing resources.
Andrew Jones, Chief Executive of LondonMetric, commented: “This acquisition is in line with our strategy of acquiring well located distribution assets that will generate real and sustainable income growth. The sector continues to benefit from growing demand/supply tension which will allow us to capture an increasing reversion over the next few years.”
LondonMetric was advised by LSH and the vendor was advised by CBRE.
