LondonMetric Property’s GBP150m joint venture with Universities Superannuation Scheme (USS) – Metric Income Plus Limited Partnership (MIPP) – has exchanged contracts to acquire a portfolio of five standalone Wickes retail warehouse units from clients of Aberdeen Asset Management.
The total purchase price of GBP28.0m (net of acquisition costs), reflects an average net initial yield of 7.2 per cent, with an average unexpired lease term of just over 10 years.
The five Wickes units are located in Oxford (28,200 sq ft), Chatham (24,900 sq ft), Maldon (27,000 sq ft), Oldham (25,000 sq ft) and Barnsley (25,900 sq ft).
MIPP will use its GBP75m loan facility to finance the purchase which will produce an average cash-on-cash return of circa 10 per cent per annum.
Andrew Jones (pictured), chief executive of LondonMetric, says: “This off-market acquisition underlines the strength of our retail relationships both in the investment and occupational market. We are already in detailed discussions with Wickes to materially extend the unexpired lease terms and progress various development initiatives, in partnership with them.
“The acquisition of these units is consistent with MIPP’s robust metrics of full occupancy, long unexpired lease terms and a strong yield on cost of circa 7.25 per cent.”
MIPP was established in November 2011 and has invested GBP126m (net of acquisition costs) to date in a total of 16 schemes.
Harvey Spack Field advised LondonMetric.