Listed property business LondonMetric has completed a series of warehouse sales in South Yorkshire.
Two distribution assets in Doncaster have been sold to an overseas buyer for £51.2m, reflecting a net initial yield of 6.2 per cent. They comprise a 330,000 sq ft mega warehouse which was acquired in 2015 for £29m and is let to Next for a further four years; and a 176,000 sq ft regional warehouse which LondonMetric’s DFS joint venture acquired in 2013 for £16.6m and is let to DFS for a further ten years.
In Rotherham, a 152,000 sq ft regional distribution warehouse has been sold to a global investor for £13.3m at a NIY of 5 per cent. The warehouse was acquired in 2014 for £10.3m and is let to the Royal Mail for a further eight years.
A ‘mega box’ warehouse in Newark has also been sold for £80.8m. The 726,000 sq ft warehouse, which is let to Dixons Carphone for a further 14 years, has been acquired by an international investor at a price which reflects a net initial yield of 5.1 per cent. The Newark property was acquired in 2014 for £68.5m.
Following the sales, LondonMetric’s big box warehousing will represent 14 per cent of its portfolio, across three assets. Income exposure from Dixons Carphone will fall significantly from 6.3 per cent to 3 per cent and DFS exposure reduces from 5.4 per cent to 4.3 per cent.
“We have taken the opportunity to respond to global investor demand for distribution warehousing to monetise some of our larger assets in geographies where we expect income growth to be more muted,” said LondonMetric chief executive Andrew Jones.
“The sales further improve the income diversification of our largest occupiers and provides headroom to invest further into urban logistics, which continues to offer superior income growth prospects.”