LondonMetric Property Plc (LondonMetric) has sold a portfolio of six distribution warehouses for £57.3 million to Canmoor and Canadian institutional investor, AIMCo, reflecting a blended NIY of 5.3%.
The portfolio has been acquired over a number of years, including last year’s acquisition of A&J Mucklow, and is located in Worcester, Leamington Spa, Royston, Castle Donnington, Milton Keynes and Huyton. Most of the buildings were constructed in the 1990s and the portfolio enjoys a WAULT to break of 7.5 years.
The warehouses are let to retailer Hamleys, CEVA, ITAB, Transmec and Groupo Antolin, an automotive supplier to JLR. The disposal will crystallise an £8.8 million profit on cost and an ungeared IRR of 11% pa, says LondonMetric.
Completion of the sale is delayed until 25 March 2021, allowing LondonMetric to receive c. £1.5 million of additional rent. Total receipts upon completion will be 3.8% above March 2020 book value.
“The attractive demand: supply dynamics in distribution and the increasing weakness in legacy sectors is attracting substantial capital into the logistics sector from both new and existing investors. Whilst we seek to avoid unnecessary asset turnover, we will always take advantage of strong approaches for our assets. These proceeds will be reinvested into other quality opportunities in the strongest geographies where rental growth over the long term will be superior,” said Andrew Jones, Chief Executive of LondonMetric.