LondonMetric rejigs convenience portfolio

Durham scheme bought for £13.3m

LondonMetric Property has sold two M&S convenience stores for £10.7m, reflecting a NIY of 4.5 per cent, and purchased a convenience development in Durham pre-let to Lidl for £13.3m, reflecting a yield on cost of 5.4 per cent.

The two M&S stores that have been sold were purchased by LondonMetric in 2015 for £7.7m at a blended yield on cost of 5.9 per cent. They have delivered an ungeared IRR of 17 per cent pa.

The 58,000-sq ft convenience development in Durham has been acquired via a forward funding contract with Kier Property. It is pre-let to Lidl and The Range for 20 years, at £13 per sq ft, and will generate £800,000 of income per annum, 40 per cent of which is RPI linked.

Chief executive Andrew Jones said: “The market for long, secure and growing income remains highly competitive, and the convenience sector continues to be well supported by shifting consumer shopping patterns.”
LondonMetric was advised by BNP on Durham. Kier Property was advised by Savills.

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