LondonMetric Property sells £36m portfolio to Pacific Industrial & Logistics REIT

By James Wallace - Thursday, April 12, 2018 10:47

LondonMetric Property has sold four distribution and two industrial warehouses for £36m, reflecting a blended net initial yield of 5.9%.

The properties are amongst the oldest within the LondonMetric portfolio and are located in the Midlands and North of England, with a WAULT to first break of 5.3 years

Five of the assets were acquired in portfolio transactions over the past three years. The sixth property is a legacy industrial asset that has recently been refurbished and re-geared.

The transaction crystallises a £5.3m profit and generates an ungeared IRR of 15% pa.

The assets have been sold to Pacific Industrial & Logistics REIT in two portfolios and the sale is conditional on completion of its recently announced fundraising:

Portfolio 1 consists of three warehouses valued at £19.5m, reflecting a NIY 6.0%;

Portfolio 2 consist of three warehouses and a plot of land with a combined value of £16.5m, reflecting a NIY of 5.8%.

Completion of the disposals have been delayed by three and five months respectively, allowing LondonMetric to continue to receive c. £700,000 of additional rent.

Andrew Jones, Chief Executive of LondonMetric, said: “As evidenced by our recent acquisitions we remain focussed on growing our logistics exposure, however we will always react to attractive off market approaches which offer our shareholders superior value. This transaction monetises our older and shorter let distribution assets in geographies where we believe rental growth is less certain.”

“Even though our portfolio is in good shape, some regular activity will ensure that it remains fit for purpose.”

James Wallace is a freelance consultant and can be reached via Linkedin or email:

Get in Touch
+44 203 205 4600