LondonMetric Property has acquired an urban logistics warehouse in London for £43.8m in a sale-and-leaseback deal.
The 115,000 sq ft warehouse in Waltham Cross is let to Reynolds, a national foodservice business, on a new 23-year lease with the benefit of CPI+1 linked rent reviews of between 2% and 4%.
The property generates a rent of £1.6m per annum which is just under 10% below market rent. The contractual rent reviews will increase the purchase net initial yield from 3.5% to an expected 4.0% after five years.
The building is located in a highly established logistics area of Enfield adjacent to the M25, less than a five minute drive from Junction 25. It occupies a 5.6 acre site and has a site cover of 41%, which is low for a London location and offers development potential.
Following the acquisition, LondonMetric’s urban logistics portfolio’s weighting towards London and the South East has increased to over 50%.
Andrew Jones, chief executive, said: “We are pleased to be able to redeploy recent sales receipts into such a high quality, well located asset offering the certainty of excellent income growth with the comfort of a high intrinsic site value.
“Assets of this quality seldom become available and we look forward to building on our relationship with Reynolds and welcome them as one of our key customers.”
LMP : LondonMetric ups urban logistics weighting with £44m London buy