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LondonMetric Property Plc (LSE:LMP) has announced the off-market acquisition of six single-let urban logistics properties for £78.0 million. The portfolio, acquired from a FTSE 100 pension fund, reflects a blended net initial yield (NIY) of 5.8%, with expectations that it will rise to 6.9% over the next two years. This strategic purchase reinforces LondonMetric’s commitment to enhancing its logistics property portfolio.
The newly acquired portfolio consists of six high-quality properties, totaling 526,000 square feet, located in prime logistics hubs across the UK, including Stafford, Banbury, Romford, Southampton, Bristol, and Aberdeen. The properties are leased to reputable tenants such as General Electric, Thales, EVRI, Macarthys Laboratories, and KCA Deutag, boasting a weighted average unexpired lease term (WAULT) of 10 years.
The portfolio currently generates an annual income of £4.8 million, equivalent to an average rent of £9.20 per square foot. Over the next two years, this figure is expected to rise to £5.8 million per annum, with rents increasing to £11.10 per square foot. This rental growth highlights the strong income potential of the assets and underscores LondonMetric's focus on enhancing its urban logistics investments.
In addition to this acquisition, LondonMetric has also announced the sale of an office asset in Edinburgh for £6.0 million. The property, leased to HSBC for a remaining five-year term, was part of the company's portfolio through the CTPT (formerly Custodian REIT) takeover. LondonMetric has now sold 14 out of 16 non-core CTPT assets, achieving an average sale price 18% above the original underwrite values.
This acquisition and sale align with LondonMetric's ongoing strategy of expanding its logistics portfolio while disposing of non-core assets to optimize its property holdings.
