LondonMetric Property reported a profit uplift in annual results of 185% to £734.5m, with its focus on the urban logistics sub-sector boosting values.
The group’s portfolio valuation was up £1bn in the year to £3.6bn, helped by valuation gains and new acquisitions.
EPRA net tangible assets (NTA) increased by 37.2% to 261.1p, driven by 67.9p of valuation gains. Net rental income was up 7.9% to £133.1m, while the portfolio’s estimated rental value (ERV) was up 10%.
EPRA earnings was up 9.2% to £93.5m, and 5.5% on a per share basis to 10.04p. The company paid dividends of 9.25p (up 6.9% on the prior year) and is expected to up this again in its first quarter of the 2023 year with a guidance of 2.3p, a 4.5% progression on the first quarter of 2022.
Portfolio
Logistics weighting increased to 74.6%, with urban logistics now at 43.9%. The company made £575m of acquisitions in the year with a WAULT of 15 years and 64% of rent subject to contractual uplifts.
The company sold £208m of assets, largely located in the Midlands and the North, with a WAULT of 10 years. Post year end, it has made acquisitions of £43m and disposals of £86m.
Leasing activity during the year totalled 166 deals and delivered £10.5m of additional annual income and 5.4% like-for-like income growth. Rent reviews were up 13%, with urban logistics assets up 22%.
The group is underway with new developments totalling 0.9m sq ft and representing £8.7m of annual rent, of which 86% is pre-let and 89% rated BREEAM Very Good.
Occupancy remains high at 98.7%, while the portfolio’s WAULT is 11.9 years. The energy performance of the portfolio improved, with EPC ratings of A-C covering 85% of the portfolio (2021: 74%).
The company’s LTV is 28.8%, with weighted average debt maturity of 6.5 years and cost of debt at 2.6%.
Andrew Jones, chief executive of LondonMetric, commented:
“Our strong set of results continues to reflect the many years of forward planning that has seen us pivot into assets that benefit from the structural shifts. After all, the macro is far more important than the micro.
“Despite the uncertain global backdrop, demand for warehousing remains both broad and deep, with online operations competing with businesses who are reacting to global trade disruptions by onshoring more of their operations and building up inventories to avoid being caught out by supply disruption. Previously we have talked about globalisation and just in time. Today it’s increasingly about localisation and just in case.
“Our investment thesis is focused on owning strong assets, in the winning sectors and in the best geographies. This has seen us significantly increase our weighting to urban logistics, our strongest conviction sector call. Falling supply, coupled with rising demand from acceleration in online shopping, growing customer expectations and the arrival of new industries such as Q-commerce and dark kitchens, is underpinning unrivalled rental growth.
“Our portfolio has been strengthened over the year by our investment, development and asset management activities, which continues to increase our rental income and again allow us to progress the dividend by 6.9%.”
LMP : Urban logistics focus pays off for LondonMetric as profits soar