Urban Logistics completes first of two LondonMetric portfolio acquisitions

The AIM-traded firm reiterated that its recent acquisitions comprised two portfolios, with it having now completed the acquisition of Portfolio 1 at an aggregate acquisition price of £19.5m, representing a net initial yield of 6.0%.

It said the gross consideration including costs for Portfolio 1 was £20.8m.

Portfolio 1 comprised three assets - a 136,383 square foot warehouse at Alfreton, let to DHL Supply Chain on an annual rent of £593,250 until August 2020; a 65,194 square foot warehouse at Leicester let to DHL Supply Chain on an annual rent of £420,000 until August 2020; and a 63,554 square foot warehouse at Northampton let to NNR Global Logistics on an annual rent of £240,000 until May 2024, with a rent review due in May 2019.

The acquisition of Portfolio 2 - three urban logistics assets and a plot of land with an aggregate acquisition price of £16.5m, representing a net initial yield of 5.8% - was continuing as planned, Urban’s board said, with completion expected no later than 7 September.

Urban Logistics said it expected the aggregate gross consideration for both portfolios to be around £38.7m - including purchaser costs of £2.4m and finance costs of £0.3m - representing a blended net initial yield of 5.9%.

The company said it would then be fully invested following the April 2018 capital raise.

Portfolios 1 and 2 had an average capital value of £72 per square foot, substantially below the cost of replacement, with average rents of £4.57 per square foot and a weighted average unexpired lease term of 5.5 years.

“We are delighted to have progressed our acquisition of assets following the recent placing,” said Urban Logistics chief executive Richard Moffitt.

“The completed portfolio is let to high-quality tenants whom we know well and with whom we will work to ensure that they get the most out of their facilities.”