LondonMetric adds three new warehouses

LondonMetric Property added three distribution warehouses to its estate on Thursday, spending £21.8m on the 212,600 square feet of space. The net initial yield on the purchase was 6.6%, contractually rising to 6.9% within two years.

The FTSE 250 firm said the warehouses were located in Castle Donington, Royston and Hemel Hempstead, and were let to toy retailer Hamleys, Howdens and Goodrich respectively. Total rent on the properties was £1.5m per annum, with a weighted average unexpired lease term of 12.4 years.

Funding for the acquisition was from the company's existing resources, and the acquisitions were from private vendors, LondonMetric confirmed.
‎
"These acquisitions reflect our increasing investment into smaller logistic depots serving major conurbations, where there is growing demand for warehouse accommodation that can satisfy customers' next day delivery requirements," said chief executive Andrew Jones.

"This particular segment of the distribution sector is experiencing strong demand/supply tension and delivering organic rental growth. We continue to see other opportunities, particularly off market, and will grow our investment within this area," he added.

Separately, LondonMetric confirmed Metric Income Plus Limited Partnership - its joint venture with Universities Superannuation Scheme - had sold its Wickes out-of-town retail unit in Nottingham for £5.2m.

Net initial yield on the transaction was 6.4%. The property was acquired in November 2012 for £4.5m, reflecting a yield on cost of 7.4%.