Wed, 19/12/2012 - 12:01
Metric Income Plus Limited Partnership (MIPP), the GBP150m joint venture between Metric Property Investments and Universities Superannuation Scheme (USS), has acquired two properties for GBP9.8m (net of acquisition costs), reflecting an average net initial yield of 7.0 per cent.
MIPP will use its GBP75 million loan facility to finance the purchase. This will produce a blended cash-on-cash return of 10.2 per cent.
At Haverhill, Metric has exchanged on its acquisition of the Cambridge Road B&Q and Halfords from LaSalle UK Ventures for GBP5.9m (net of acquisition costs), reflecting a net initial yield of 6.75 per cent.
The 39,000 sq ft park is anchored by B&Q (35,100 sq ft) and Halfords (3,900 sq ft). The average unexpired lease term is 15 years and the average passing rent is a low GBP10.80 psf.
At Nottingham, Metric has completed on the acquisition of a 23,600 sq ft Wickes unit for GBP3.9m (net of acquisition costs), reflecting a net initial yield of 7.3 per cent.
As part of the transaction, Metric has simultaneously agreed terms with Wickes to extend its lease from seven years unexpired to 18 years term certain and negotiated a fixed minimum rental uplift in December 2014, increasing the yield on cost from 7.3 per cent to 7.4 per cent. The average passing rent is GBP14.65 psf.
Andrew Jones (pictured), chief executive of Metric, says: “At Haverhill, the low average passing rent is among the lowest across B&Q’s portfolio and provides a solid base for rental growth. Nottingham represents a further retail partnering deal where we have been able to work closely with Wickes to deliver an enhanced unit and at the same time improve the unexpired lease term by 11 years.
“The MIPP portfolio continues to evolve and we remain on target to be fully invested in one years’ time. The portfolio has strong covenants and 34 per cent of the portfolio’s income benefits from RPI/fixed uplifts. The addition of Haverhill and Nottingham provide further income diversification and strong trading platforms.”
MIPP was established in November 2011 and has invested GBP81m (net of acquisition costs) to date in a total of nine schemes, reflecting a yield on cost of 7.2 per cent. Rents across the MIPP portfolio average GBP14.80 psf with an average unexpired lease term of 16 years. The portfolio is fully occupied.
Bidwells advised Metric and Lewis & Partners advised LaSalle UK Ventures on Haverhill. Harvey Spack Field advised Metric on Nottingham.
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