LondonMetric sells Morrisons in Loughborough for £33m

LondonMetric Property announced on Wednesday that it sold its Morrisons food store in Loughborough for £32.5m, reflecting a net initial yield of 4.25%.

The FTSE 250 company acquired the asset for £16.8m in 2010 at a net initial yield of 5.72% and recently completed a “comprehensive refurbishment” and 12,000 sq ft extension at a cost of £7.9m.

Morrisons subsequently entered into a new 25 year lease in January 2017 on the extended 55,000 sq ft store at an annual rent of £1.5m, with contractual RPI uplifts.

The company said the sale to a UK pension fund would complete in March 2018 at a price 11% above last reported book value, and crystallised a profit on cost of 26%.

“The lease re gear and extension at Loughborough demonstrates our ability to partner with retailers to create value through our asset management and development capabilities,” said chief executive Andrew Jones.

“This is a very good asset that has generated attractive income and capital returns and the pricing reflects the strong institutional demand for long let income with guaranteed income growth.”