LondonMetric sells six warehouses in £36m deal

LondonMetric Property announced the disposal of four distribution and two industrial warehouses for £36m on Thursday, reflecting a blended net initial yield of 5.9%.

The FTSE 250 company said the properties were among the oldest within its portfolio, and were located in the Midlands and North of England, with a weighted average unexpired lease term to first break of 5.3 years

Five of the assets were acquired in portfolio transactions over the past three years.

The sixth property was described as a legacy industrial asset, that had recently been refurbished and re-geared.

LondonMetric said the transaction crystallised a £5.3m profit, and generated an ungeared internal rate of return of 15% per annum.

The assets were sold to Pacific Industrial & Logistics in two portfolios, with the sale conditional on completion of its recently-announced fundraising:

LondonMetric said the first portfolio consisted of three warehouses valued at £19.5m, reflecting a net initial yield of 6.0%, while the second portfolio consisted of three warehouses and a plot of land with a combined value of £16.5m, reflecting a net initial yield of 5.8%

Completion of the disposals had been delayed by three and five months respectively, allowing LondonMetric to continue to receive around £0.7m of additional rent.

“As evidenced by our recent acquisitions we remain focussed on growing our logistics exposure, however we will always react to attractive off market approaches which offer our shareholders superior value,” said LondonMetric chief executive Andrew Jones.

“This transaction monetises our older and shorter let distribution assets in geographies where we believe rental growth is less certain.”