Warehouse developments

LondonMetric to buy two Surrey warehouse developments for £13m

FTSE 250 Real Estate Investment Trust LondonMetric Property PLC has announced that it has agreed to purchase two distribution warehouse developments for £13.1m.

The purchase will be completed via a forward funding contract with Kier Property.

Construction will commence imminently with practical completion targeted for May 2018.

The warehouses will be located at Logistics City in Frimley next to junction 4 of the M3 (12 miles from the M25), have a combined floor space of 62,000 sq ft and an anticipated yield on cost of 5.3%.

The larger unit – which will extend to 38,000 sq ft– has been pre-let to a FTSE 100 company on a 15-year lease with a rent agreement of £400,000 pa, subject to five-yearly, RPI-linked rental uplifts of between 1-3% pa.

Andrew Jones, chief executive of LondonMetric, said: “This investment will take our urban logistics portfolio to circa £200m, with 63% based in the South East.

“These two warehouses are well located and – with restricted supply and strong occupier demand in the South East – we anticipate good interest for the remaining space.”

LondonMetric will benefit from a 5.75% funding coupon during construction.

Pip Prongué, managing director of Kier Property in the South, added: “We are delighted to be working with LondonMetric on developing out these two units and in particular bringing forward the delivery of the pre-let.

“Following the development of our adjacent Trade City scheme, this represents the final phase of development of our Frimley scheme.”

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