LondonMetric Property Plc is selling a portfolio of four multi-let West Midlands industrial estates to Hines, for £40.5 million.
The estates total 435,000 sq ft across 47 units and generate £2.7 million p.a. of rental income, with a WAULT to first break of 2.9 years. The net initial yield is 6.2%.
Three of the West Midlands industrial estates are in Birmingham, at Kingshill, Redwood Park and also Shenstone. The fourth is in Triton Park, Rugby.
The properties were previously part of the Mucklow acquisition in June 2019 for an allocated price of £30.9 million.
The sales crystallise an ungeared IRR of 13% and are in line with March 2023 book value. LondonMetric has now disposed of £194 million of former Mucklow assets. This equates to 35% of the original portfolio and also generates a 26% uplift against allocated cost.
Andrew Jones, Chief Executive of LondonMetric, says, “These assets have delivered returns materially above our initial expectations from a combination of rental growth and yield compression. The sale is expected to be EPS accretive and represents our exit from highly operational multi-let industrial estates.
“Looking forward, we will continue to focus on aligning the portfolio to [triple net lease] NNN lease assets that can deliver secure income and growth without incurring dilutive operational costs.”
LondonMetric was advised by ACRE.
