LondonMetric Property has sold two mega box warehouses and two regional distribution warehouses, in three transactions, for a combined consideration of c. €170m (£145.3m).
In Newark, it has sold a 726,000ft² mega warehouse to an international investor for €94.6m (£80.8m), reflecting a NIY of 5.1%. The asset was acquired in 2014 for €80.2m (£68.5m) and is let to Dixons Carphone for a further 14 years.
In Doncaster, two distribution assets have been sold to an overseas buyer for €59.9m (£51.2m), reflecting a NIY of 6.2%. They comprise a 330,000ft² mega warehouse which was acquired in 2015 for €33.9m (£29m) and is let to Next for a further four years at a rent of €7.73 (£6.60) psf; and a 176,000ft² regional warehouse which LondonMetric’s DFS joint venture acquired in 2013 for €19.4m (£16.6m) and is let to DFS for a further 10 years at a rent of €8.2 (£7.00) psf.
In Rotherham, a 152,000ft² regional distribution warehouse has been sold to a global investor for €15.6 (£13.3m) at a NIY of 5.0%. The warehouse was acquired in 2014 for €12 (£10.3m) and is let to the Royal Mail for a further eight years at a rent of €5.50 (£4.70) psf.
The four properties have a WAULT of 10 years and generate rent of €9.7 (£8.3m) pa (LondonMetric share), of which c.€4.6m (£3.9m) is subject to delayed completion until June 2020. The assets have delivered ungeared IRRs of between 8% to 10% since purchase.
Andrew Jones, Chief Executive of LondonMetric, commented: “We have taken the opportunity to respond to global investor demand for distribution warehousing to monetise some of our larger assets in geographies where we expect income growth to be more muted. The sales further improve the income diversification of our largest occupiers and provide headroom to invest further into urban logistics, which continues to offer superior income growth prospects.”
