LondonMetric expands distribution portfolio, buys Royal Mail centre

20th Dec 2013 07:58

Real estate firm LondonMetric Property (LMP) announced on Friday that it has exchanged on two deals, acquiring a Royal Mail distribution centre in Daventry and selling a retail park in Congleton.LMP is buying up Royal Mail's main distribution centre at Daventry International Rail Freight Terminal from Meghraj Properties for £36m, reflecting a net initial yield of 6.7%.The 272,600 square-foot property is located in one of the UK's "primary distribution locations", LMP said, adjacent to the M1 in Northamptonshire. It generated £2.5m per annum in rent and currently has an unexpired lease term of 9.7 years.Seperately, LMP has agreed to sell the Congleton Retail Park for £16.4m to Lothbury Investment Management, reflecting a net initial yield of 5.85%.The 64,500 square-foot shopping destination, which was acquired by LMP for £14.9m in 2011, is let to tenants including M&S Simply Food, Laura Ashley and Carphone Warehouse.LMP's resultant portfolio following the deal is valued at £1,073m, with distribution now accounting for 23% of total assets."The Royal Mail distribution centre represents an attractive off-market acquisition that is in line with our strategy of increasing our ownership of key distribution assets that will continue to benefit from the growth in online retail spending," said Chief Executive Andrew Jones."We expect this week's portfolio repositioning to increase our net rental income, after interest, by over £1.2m per annum as well as adding a further £26.2m to existing reserves for future investment."BC