Londonmetric buys warehouses from Argos, WH Smith

15th Jul 2013 07:59

Real estate group Londonmetric Property has bought two UK warehouses from Argos and WH Smith as it continues to expand its retail distribution portfolio.The FTSE 250 has exchanged on the Argos Distribution Warehouse in Bedford for £51.65m, reflecting a net initial yield of 7.0%. This 657,500 square foot (sq ft) property is Argos' key distribution centre in the UK. The unexpired lease term is 9.5 years.Meanwhile, the 211,000 sq ft WH Smith Distribution Unit in Birmingham - one of the retailer's three distribution warehouses in the UK - will be bought for for £10.1m (net initial yield of 7.9%). It is currently let for 11 years but Londonmetric has agreed to surrender the existing lease and grant a new 21-year lease to WH Smith.The purchases increase Londonmetric's retail distribution portfolio to five with a combined portfolio value of £164.8m, equal to 14% of the firm's total portfolio."The Argos and WH Smith Distribution Units represent the latest in a number of deals that we are working on within the retailer distribution sub-sector," said Chief Executive Andrew Jones. "These are assets that deliver not only a high income yield, but also high occupier contentment and demonstrate again the benefit of our strong occupier relationships which we believe provide us with a competitive advantage. We continue to successfully sell down our residential investment holdings and re-invest into retail and retailer distribution sectors where we can deliver more attractive income and capital returns."