LondonMetric Property has published its interim management statement following the completion of the merger between London & Stamford Property and Metric Property Investments.
The statement covers the period 1 October 2012 to 1 February 2013 and represents substantially the pre-merger trading performances of both companies.
Completion of the merger of London & Stamford and Metric, announced on 25 January 2013, created a Reit with a high quality property portfolio of circa GBP1.04bn.
During the period in question, LondonMetric Property exchanged contracts to acquire a portfolio of six retail warehouse assets for GBP92.4m reflecting a net initial yield of 7.8 per cent, while also disposing of a 15.7 per cent share in Meadowhall Shopping Centre realising GBP95.8m (net of debt) at a net initial yield of 5.1 per cent.
The company also completed the acquisition of 107 residential units at Seward Street, Islington, EC1 for GBP45.7m, and on behalf of Metric Income Plus Partnership (MIPP) acquired three retail parks for GBP20.7m (LondonMetric share: GBP6.9m).
Nine retailer transactions were also completed across 95,000 sq ft at average rents 11 per cent above previous rental levels, while some 102 new lettings and renewals concluded across the residential investment portfolio at 2.75 per cent above previous passing rents. The company also completed retail developments at Bishop Auckland Phase I and Cannock with 100 per cent and 87 per cent occupancy, respectively.
Andrew Jones, chief executive of LondonMetric, says: “We are excited to have announced the GBP92.4m retail portfolio acquisition so soon after completing the merger, as well as the value enhancing asset management activity that has been undertaken across the portfolio, while the merger was being progressed.
“We are also looking at capitalising on our strong retailer relationships to provide real estate solutions in the distribution sector. This is a sector where demand from retailers is now dominating space requirements as they continue to respond to the growth in multi-channel retailing.
“Deep occupier demand for our buildings is a critical ingredient in assessing where we choose to invest and will ultimately allow us to deliver superior returns. We will continue to adopt our disciplined approach of focusing on assets that are well let at sustainable rents to good covenants, with high occupier contentment.
“There is compelling evidence that more attractive opportunities across the market are becoming available as the world continues to deleverage and a much broader range of vendor is beginning to appear. We are pursuing a number of opportunities to utilise our firepower as the spread between the cost of funding and property yields continues to offer attractive cash-on-cash yields.
“We have launched a GBP100m tender offer for almost 88.6 million shares or circa 12.4 per cent of our issued share capital. The tender offer price is 112.9p. To the extent that the tender offer is not fully taken up, we are confident that we will be able to invest the additional firepower to enhance shareholder value.”