LondonMetric acquires massive retail distribution site

1st Apr 2014 07:23

Property investor LondonMetric has acquired a midlands retail distribution centre outside London that is one of the largest pre-lets in the country. The real estate investment trust (REIT) exchanged contracts on the 1.06m square feet property for an anticipated £77m, which increased its distribution assets to 33% of its property portfolio by value. The 70-acre site has an outline planning consent and, with construction of the main works expected to begin this summer and be complete in summer 2015, the entire centre has been pre-let to a 'top 25' retailer on a new 25-year lease at an initial rent of £5 per sq ft that equates to a yield on cost of 6.9%.Chief Executive Andrew Jones said: "This is one of the UK's largest ever pre-let developments and an integral part of our strategy to deliver well let short cycle developments in partnership with our key operators. The distribution market is evolving very quickly with take-up forecast at 50m square feet over the next five years. "We are a partner of choice to many of the UK's leading operators and look forward to delivering this latest generation distribution centre which will materially enhance our existing portfolio and significantly grow our contracted rental income."Earlier in March the £22m acquisition of Oak Furniture Land's distribution centre meant the company had, since the half-year end, increasing its portfolio weighting by value from 20% to 28%.OH