LondonMetric Property has bought 14 urban and regional logistic warehouses for £116.6m from Cabot Properties.
The purchase price reflects a day one yield on cost of 6.1% and a reversionary yield of 6.6%.
Of the 14 buildings 11 are last mile/urban logistic warehouses and over half are located in the South East and Midlands.
The 1.3m sq ft portfolio has a weighted average unexpired lease term of 5.6 years and is let at a low average rent of £5.50 / sq ft. Over 60% of the £7.2m income is from retailers and third party logistics operators including DHL, Howdens, Unipart and Royal Mail.
The acquisition increases LondonMetric’s distribution weighting to 69%.
Andrew Jones, chief executive of LondonMetric, said: “Following recent non-core disposals of Milford Haven, Loughborough and Marlow totalling £116.3m, we are pleased to have re-invested the sale proceeds into the distribution sector within such a quick timescale.
“The urban logistics market continues to benefit from a highly favourable demand/supply imbalance and this acquisition further increases our critical mass in this sub-sector to over £260 million across 38 assets. The acquired portfolio is fully income generating and offers good opportunities to extend lease lengths and capture strong income growth.”
LondonMetric was advised by JLL. Accord Capital Partners, along with its affiliate, Accord Europe, served as exclusive global capital advisor to Cabot Properties.
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