London property company acquires growth fund for £122m

LondonMetric Property PLC has acquired Savills IM UK Income and Growth Fund in a corporate transaction valued at £122.2m, reflecting a blended yield on cost of 4.3 per cent and an anticipated reversionary yield of 4.9 per cent.

The Fund owns a portfolio of 15 assets across 482,000 sq ft with 75 per cent in urban logistics and the remainder comprising long income assets.

74 per cent of the assets are located in London and South East with key locations including Croydon, Farnborough, Hounslow, Greenwich, Guildford, Maidstone and Stevenage. A further 12 per cent of the portfolio is located in the Midlands.

The portfolio has a WAULT of 11.0 years (9.2 years to first break) and key occupiers include Decora, Fujitsu, Grafton, HSBC, Iveco, MKM, and Volkswagen. It generates £5.35m of rent per annum with 43 per cent of the income benefitting from contractual uplifts.

Andrew Jones, chief executive of LondonMetric, commented: “Following our equity placing last month, we are pleased to have quickly invested a substantial proportion of the proceeds into this high quality portfolio.

“Reflecting their London & South East weighting, we expect these assets will continue to perform strongly as high occupier demand and diminishing warehouse supply drive rental growth higher.”

Jamie Pearson, Savills Investment Management, commented: “This portfolio has been carefully constructed on behalf of our investors. Our early move to create a portfolio dominated by high quality London & South East Industrial assets has consistently delivered benchmark beating returns and ultimately a favourable exit for our investors.”