LondonMetric to buy two distribution warehouses in Frimley

LondonMetric has agreed to buy two new distribution warehouses at Logistics City in Frimley for £13.1m via a forward funding contract with Kier Property.

The price reflects an anticipated yield on cost of 5.3% and the warehouses are located on an established South East logistics estate next to J4 of the M3 and 12 miles from the M25.

The largest unit, which will extend to 38,000 sq ft, has been pre-let to a FTSE 100 company on a 15-year lease at a rent of £0.4m per year, subject to five yearly retail price index linked rental uplifts between 1% and 3% a year.

LondonMetric, which will benefit from a 5.75% funding coupon during construction, said construction will begin imminently with practical completion targeted for May 2018.

Chief executive Andrew Jones said: "This investment will take our urban logistics portfolio to circa £200m, with 63% based in the South East. These two warehouses are well located and, with restricted supply and strong occupier demand in the South East, we anticipate good interest for the remaining space."