LondonMetric Property Plc has announced a series of acquisitions and disposals totalling £124 million, marking a significant reshaping of its portfolio. The company has divested ten non-core properties for £74.2 million (LondonMetric share: £69.4 million) at a net initial yield (NIY) of 6.9% and acquired seven properties for £50.1 million, reflecting a rising NIY of up to 7.2% over five years.

Strategic Disposals: Focus on Core Growth

The sale of ten non-core properties includes:

• Coventry Retail Park: Sold for £37.3 million (NIY of 5.5%, topped up to 6.0%), this 138,000 sq ft site features tenants like Currys, Aldi, and B&M. Originally acquired for £18 million in 2010, the park delivered a profit on cost of 37%.
• Compass Training Office in Yarnfield: Sold for £17.4 million.
• Totton Convenience Retail Park: Sold for £9.5 million (£4.7 million at LondonMetric’s share).
• Coventry Offices: Sold for £3.3 million, completing the sell-down of 11 offices acquired through the A&J Mucklow acquisition.
• Stonegate Pubs in Preston and Southampton: Sold for £3.3 million.
• Former Dobbies Garden Centre in Huddersfield: Sold for £3.1 million.
• Development Land Parcels: Sold for £0.3 million.

Since March 2024, LondonMetric has offloaded 65 assets for £307 million (LondonMetric share: £302 million), achieving a 2% premium above book value.

Targeted Acquisitions: High-Yield Opportunities

LondonMetric’s acquisitions total £50.1 million, reflecting a strong focus on high-quality assets with promising rental growth. Highlights include:

• Travis Perkins Trade Warehouses: Four sites acquired for £16.4 million on a 15-year sale and leaseback agreement with open market reviews.
• Premier Inn, West Thurrock: A 193-room hotel purchased for £14.7 million, let for ten more years with RPI-linked reviews.
• Andover Convenience Retail Property: A 54,000 sq ft site acquired for £12.2 million, let to tenants including Wickes, The Range, and KFC.
• M&S Foodstore Development: A new 22,000 sq ft foodstore pre-let on a 15-year lease, to be developed at a cost of £6.8 million with a 7.8% yield on cost.

Commentary on the Moves

Andrew Jones, Chief Executive of LondonMetric, highlighted the company’s strategy:
“We have again successfully disposed of non-core assets at prices in line with our valuations and reinvested into higher-quality opportunities in strong conviction sectors, where rental growth prospects are more compelling.”

Future-Focused Portfolio Optimisation

This reshuffling aligns with LondonMetric’s broader strategy of enhancing portfolio quality, boosting rental income, and focusing on high-demand sectors. By divesting less lucrative assets and reinvesting in prime properties with strong growth potential, LondonMetric is positioning itself for sustained success in a competitive market.

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