LondonMetric makes two new property acquisitions

LondonMetric Property announced two acquisitions for a total consideration of £72.9m on Thursday, with both transactions having previously been identified by the company at the time of its recent equity placing.

The FTSE 250 firm said that, through a £62m sale and leaseback, it had acquired a portfolio of five food stores let to Waitrose on new 20-year leases, with CPIH-linked rent reviews.

It said the assets, in Keynsham, Malmesbury, Paddock Wood, Towcester and Yateley, ranged in size from 27,000 square feet up to 43,000 square feet, and also operated as online fulfilment centres for both Waitrose and John Lewis.

Waitrose would continue to trade from the stores as normal, with no change from a customer or Waitrose Partner perspective.

LondonMetric said it also purchased a 32,000 square foot urban logistics unit in Walthamstow for £10.9m, let to Ocado.

The property was described as a “prime, modern and well configured” unit on a two acre site, with low site density.

It was let for a further eight years, with passing rent between 20% and 25% below market rent, with an open market review in 2023 expected to capture “significant” rental reversion.

Together, LondonMetric said the assets generated a total rent of £3.34m per annum, reflecting a blended net initial yield of 4.3% and a reversionary yield of 5.0%.

“We live in a world of continuing disruption which is exposing both winning and losing strategies almost on a daily basis,” said chief executive officer Andrew Jones.

“These are high quality and well located assets in structurally supported sectors, let to strong occupiers that offer secure triple net income and the certainty of income growth.”

Jones said the investments would increase the company’s exposure “further” to the winning sectors and occupiers, with Waitrose now a top 10 occupier and Ocado a new addition to its customer base.

“In a macro environment characterised by zero interest rates, well let properties are becoming increasingly sought after.

“Following our other long income acquisitions announced earlier in the month, we have now invested £83m of the £120m raised in our equity placing and are progressing well on other opportunities that have similarly attractive qualities.”

At 0800 BST, shares in LondonMetric were up 0.38% at 212.8p.