LondonMetric Property has bought two distribution warehouses at Logistics City in Frimley for £13.1m via a forward funding contract with Kier Property, reflecting an anticipated yield on cost of 5.3%.
Located next to J4 of the M3 and 12 miles from the M25, the two warehouses will total 62,000 sq ft.
The largest unit, which will extend to 38,000 sq ft, has been pre-let to a FTSE 100 company on a 15-year lease at a rent of £400,000 a year, subject to five yearly retail price index-linked rental uplifts between 1% and 3% pa.
Construction will commence imminently with practical completion targeted for May 2018. LondonMetric will benefit from a 5.75% funding coupon during construction.
Andrew Jones, chief executive of LondonMetric, said: “This investment will take our urban logistics portfolio to circa £200m, with 63% based in the south east. These two warehouses are well located and, with restricted supply and strong occupier demand in the south east, we anticipate good interest for the remaining space.”
LondonMetric was advised by Kimmre. Kier was advised by Savills and Cushman & Wakefield.
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