LondonMetric sells portfolio of six retail assets

(Sharecast News) - LondonMetric Property has sold a portfolio of long income assets to S&P 500 real estate investment trust Realty Income for £40.9m, it announced on Thursday, reflecting a blended net initial yield of 5.9%.

The FTSE 250 company said the portfolio comprised six assets with a weighted average unexpired lease term of 11 years.

It said the first asset was a 106,000 square foot retail asset in Leicester let to B&Q, Home Bargains and Smyths Toys.

The property generated a rent of £1.8m per annum, and was let for a further 10 years term certain following a recent regear of the 77,000 square foot B&Q store.

LondonMetric said the second property was a 32,000 square foot Wickes store in Halesowen, which it acquired as part of the Mucklow acquisition, with a weighted average unexpired lease term of eight years, while the third was a 15,000 square foot Aldi store in Hull, which had a weighted average unexpired lease term of nine years.

The rest of the sale was made up of three KwikFit service stations which were acquired through a larger portfolio acquisition, and had a weighted average unexpired lease term of 14 years.

LondonMetric said the assets had delivered an ungeared internal rate of return of 8% per annum, with the sale crystallising a total return on cost of 50% over an average hold period of six years.

The disposal was at a 7% premium to the last reported book value.

"These are all very well let assets that have delivered strong performances and their disposal crystallises an attractive surplus to our original purchase prices," said chief executive officer Andrew Jones.

"The transaction is in line with our strategy of allocating further capital into the logistics and convenience grocery sectors."

At 0849 GMT, shares in LondonMetric were up 0.52% at 212.2p.