LondonMetric in £97m placing to fund new deals
LondonMetric Property unveiled a £97m placing on Thursday to fund the acquisition of “last mile" assets, along with a series of warehouse deals that the cash will be spent on.
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The FTSE 250-listed company said it would issue up to 62.8m shares, or 9.9% of its share capital.
It added that it had exchanged contracts with Michelin to build a new 137,000 sq ft distribution centre at its site in Stoke and another with Eddie Stobart to build a single new 180,000 sq ft distribution unit at its logistics centre in Dagenham.
Conditions on a separate 15 year letting arrangement with online retail giant Amazon at Warrington had been met and the company had taken occupation of the premises.
Transport firm Eddie Stobart signed a new 26 year lease across the enlarged 436,000 sq ft logistics centre at an increased rent, subject to five yearly RPI rent reviews.
Planning consent has already been received and construction is expected to commence next month with completion by April 2018. As part of the redevelopment, two existing units totalling 150,000 sq ft will be demolished.
Total development costs are anticipated to be £16m, delivering a marginal yield on cost of 5.75%.
LondonMetric said £42m of the placing would fund distribution developments at Dagenham, Stoke and Crawley, totalling 560,000 sq ft, at an anticipated yield on cost of 6.2%; £28m for recently completed distribution investments acquired at a blended net initial yield of 5.9% and a reversionary yield of 6.4% and £30m to fund a pipeline of last mile and regional distribution investments.
It expected to deploy 75% of the funds within six months.
“The placing is expected to be earnings per share accretive following completion of the three developments, which is expected to occur over a nine to 12 month period,” the company said.