LondonMetric Property swaps M&S for Lidl – LondonMetric Property has sold two M&S convenience stores for GBP10.7 million, reflecting a NIY of 4.5%, and purchased a convenience development in Durham pre-let to Lidl for GBP13.3 million, reflecting a yield on cost of 5.4%.
The two M&S stores that have been sold were purchased by LondonMetric in 2015 for GBP7.7 million at a blended yield on cost of 5.9%. They have delivered an ungeared IRR of 17% per annum.
The 58,000 sq ft convenience development in Durham has been acquired via a forward funding contract with Kier Property. It is pre-let to Lidl and The Range for 20 years, at GBP13 psf, and will generate GBP0.8 million of income per annum, 40% of which is RPI linked.
LondonMetric will benefit from a 5.5% funding coupon during construction, which is expected to commence shortly and complete in the first half of 2019.
Andrew Jones, Chief Executive of LondonMetric, commented: “The market for long, secure and growing income remains highly competitive, and the convenience sector continues to be well supported by shifting consumer shopping patterns.”
LondonMetric was advised by BNP on Durham. Kier Property was advised by Savills.
LMP : LondonMetric Property swaps M&S for Lidl