LondonMetric Property sells more retail parks to focus on logistics

FTSE 250 logistics investor LondonMetric Property has sold three retail parks in Christchurch, Bedford and Maidstone for a collected £60.9m.

The proceeds from the sale will be invested into the company’s logistics investment and development programmes “where rental growth prospects look more attractive”.

The sales were made at the September 2016 book value and have a crystallised, ungeared initial rate of return of 12.5%.

Chief executive Andrew Jones said: "These have been very successful investments and we will continue to sell our well let mature retail assets upon completion of their business plans.”

LondonMetric’s retail park investments have halved over the last two years and now represent 13% of its total portfolio.

The Christchurch retail park was sold to a client of Orchard Street Investment Management for £34.5, which represents a net initial yield of 5.65%.

LondonMetric bought this property in 2013 for £27.1m and it has since been let to Costa, DFS, Home Bargains and Subway with a weighted average unexpired lease term of seven years.

The Alban Retail Park in Bedford was sold to Tritax Property Income Fund for £14.4m, which represents a net initial yield of 5.9%.

It was bought in 2010 for £9.2m and the company said that following asset management initiatives with B&M, Dunelm and Gym Group, rental income increased by over 30% with a weighted average unexpired lease term of 8.3 years.

Lastly, the DFS property in Maidstone, was sold to a client of Helix Property Advisors for £12m, with LondonMetric receiving £3.7m in the joint venture, which reflects a net initial yield of 7.5%.

The company bought this property in 2014 as part of a portfolio of DFS stores off an overall net initial yield of 9.3%.