LONDON, UK: LondonMetric Property has acquired a NNN retail asset from an open ended property fund for £38.0 million through one of its joint ventures (LondonMetric share: £19.0 million).
This displays an preliminary yield on cost to LondonMetric of 5.4%, rising to 5.7% upon completion of short time period asset administration initiatives.
The 68,000 sq ft property is found on a 5 acre site on the Old Kent Road in South East London and is let to B&Q, Pets at Home and Halfords. The site advantages from planning for 1,100 new residential apartments.
Simultaneous with the acquisition, LondonMetric has materially prolonged the WAULT and elevated the annual rent by 54% from £1.4 million to £2.1 million, with 85% of the income topic to contractual rent reviews. Upon settlement of the subsequent reviews and completion of different asset administration initiatives, the yield on cost is anticipated to extend to c.7%.
Following the acquisition, LondonMetric has a 69% fairness curiosity within the joint venture.
The acquisition follows on from LondonMetric’s recent sale of a retail park in Tonbridge for £22.0 million at a NIY of 5.2%.
Andrew Jones, Chief Executive of LondonMetric, commented: “This is an distinctive asset in a prime central London location the place the demand for higher worth alternative makes use of greater than underpins the acquisition price. The simultaneous regears and rental will increase demonstrate our strong retailer relationships and excessive occupier dedication to retain illustration in a location the place de-retailing is seeing excessive quality retail space misplaced to alternative makes use of on an almost unprecedented basis.”
LondonMetric was suggested by Cortex Partners and Savills suggested the vendor.