Londonmetric capitalising on strengthening markets

7th Aug 2014 12:04

Londonmetric Property has made further progress in developing its portfolio in the first quarter, with £77m invested since the end of the year, capitalising on strengthening markets and a 220 basis point yield arbitrage.Management said investment and occupational markets were strengthening and the company was acquiring assets where it is able to add value and grow income, while continuing to dispose of non-core properties as well in core sectors when appropriate due to strong market pricing.In its first quarter statement for 2015 announced on Thursday, the company revealed four property acquisitions for £26.4m at an average yield of 6.9%, while its commercial disposals totalled £33.8m, 2.6% ahead of March valuation.The company's residential disposals amounted to £16.9m across 32 units and were in line with March valuation and the business plan, it said."We are making material progress in growing our rental income through accretive investments and from our asset management and development activities," said chief executive Andrew Jones."We are laying the foundations for future income and capital growth across our two core sectors and these will become the key financial metrics once market yield compression has run its course."In a research note on Thursday, Sanlam noted that the company was making hay while the UK recovery gathers pace and yields are reducing as investment activity increases, "hinting that future asset valuations for the group are likely to use lower yield levels".Londonmetric shares were up 0.58% at 138.10p at 10:37 on Thursday.DC