LondonMetric Property has sold four retail properties from its long income portfolio for £22.2 million, reflecting a blended NIY of 4.6%. The company also announced the acquisition of three convenience service stations for £10.8 million, reflecting a NIY of 4.7%.
In Haslemere and Ferndown, it has sold two M&S food stores to a local authority for £14.68 million, reflecting a NIY of 4.0%. The properties have a WAULT of 15 years.
In Leicester, a stand-alone Matalan unit has been sold to private investors for £3.4 million, reflecting a NIY of 5.0%. The store has less than three years left to expiry and has redevelopment opportunities. Completion of the sale has been delayed until June 2021.
On the Isle of Man, a property occupied by Boots and SPAR has been sold to a local purchaser for £4.1 million, reflecting a NIY of 6.5%. The Boots was re-geared recently onto a new 10 year lease.
The disposals crystallise a £4.1 million profit on cost and deliver an ungeared IRR of 11% pa since purchase. Total receipts upon completion will be 1.3% above March 2020 book value.
Separately, LondonMetric has acquired three BP/M&S convenience service stations in Brentwood, Pevensey and Lewes for £10.8 million, reflecting a NIY of 4.7%, rising to 5.2% over five years. The portfolio is let to BP for another 16 years and generates a rent of £0.54 million p.a., with fixed rental uplifts. Vacant possession value is materially above the purchase price.
“In a zero interest rate environment, well-let real estate continues to be in demand and so we have reacted to attractive offers to monetise select assets, including further non-core properties acquired through the Mucklow deal. These are all good sales which, together with our latest acquisition of three quality assets let to BP, improves our income granularity, lease lengths and credit whilst providing better certainty of income growth and geographical focus,” said Andrew Jones, Chief Executive of LondonMetric.