LondonMetric buys Reading warehouse for £28.8m

LondonMetric Property has acquired a 230,000 square ft distribution warehouse from a private vendor for £28.8m, which will be funded from existing resources, reflecting a net initial yield of 5.8%.

The warehouse is situated in a prime distribution location on a 11.5 acre site in Reading, next to Junction 11 of the M4, and close to Tesco's 1mn sq ft regional hub. Other companies nearby include Royal Mail and Proctor & Gamble.

The building is let to DHL for a further 10 years at £1.8m per annum, which equates to £7.73 per square foot, with an open market rent review due in July 2020.

Chief Executive Andrew Jones said: ‎"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."