LondonMetric pays £21.2m for Doncaster shed
Let to clothes retailer Next for a further 13 years, the 260,000 sq ft-plus regional logistics warehouse brings in more than £1.4m in rent a year.
The rent equates to £5.37 per sq ft, but the lease on the 264,000 sq ft asset benefits from annual fixed rental uplifts of 2.5% which will increase the purchase net initial yield to 7.1% within three years, the firm said.
LondonMetric’s buy reflects a focus on stronger use-classes, coming in tandem with the £7m-plus disposal of a Chiswick office building.
Andrew Jones, chief executive of LondonMetric, said: “As the UK economy reaches an inflection point on both inflation and interest rates, we are increasingly attracted to triple net leased assets that have strong income compounding characteristics and certainty of growth.
“We have continued to successfully exit non-core assets and reinvest into sectors that benefit from structural tailwinds.”
LondonMetric was advised by GV&Co.
This is not the first Next site acquired by the investor, which in 2015 paid £29m for a 330,000 sq ft facility built for the retailer near Wakefield.
The Doncaster facility, at West Moor, sits close to a larger (690,000 sq ft) Next facility.