LondonMetric Property announced the acquisition of two urban logistics properties for £28.8m which are expected to generate £1.4m per year in rent on Wednesday.
LondonMetric paid £28.8 million for two urban logistics properties in separate transactions, implying a blended return of 4.5% and a reversionary yield of 5.0%.
One of the properties is a 125,000sqft urban logistics forward fund development consisting of two units at Crosslink 646 in Leicester, which is planned to be completed at the beginning of 2023.
It is the largest unit, with a total area of 90,000sqft which has been pre-let to EM Pharma for a new 15-year lease at £7.25 per sqft with RPI linked rent reviews.
The smaller 35,000sqft property will be built on the speculative market and is estimated to offer a 5% return on investment with the benefit of a solar PV system, the property is likely to be certified BREEAM “Very Good”.
The other acquisition is a piece of land in Droitwich that amounts to 9-acre and is now utilised for car storage which has been leased to Amazon for another five years with CPI-linked rent increases.
It’s in the front of a well-established industrial development near the A38, two miles from M5 J5.
The property’s parking area features EV charging facilities for 100 vans, thanks to Amazon’s contribution and has a 200,000sqft distribution warehouse which has been approved for the site.
LondonMetric’s latest acquisitions are expected to generate rent of £1.4m per annum.
Andrew Jones, CEO of LondonMetric, commented, “We are continuing to allocate capital into the strongest geographies within the distribution sector, where we can benefit from attractive entry yields and structurally supported occupier demand to capture superior rental growth.”
LondonMetric shares dropped 1.2% to 270p on Wednesday after the company announced the acquisition of two separate properties for £29m.