Royal Mail distribution centre sold in multi-million-pound deal

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LondonMetric Property Plc has announced that it has exchanged on the sale of a Royal Mail distribution warehouse in Daventry to Tritax Big Box REIT plc for £48.8 million, reflecting a NIY of 5.0 per cent.

LondonMetric acquired the bespoke 272,000 sq ft warehouse in 2014 for £36.0 million, reflecting a NIY of 6.7 per cent. It generates income of £2.6 million pa and has an unexpired lease term of 6 years.

The property has generated a profit on cost of 31 per cent and has been sold at marginally above book value.

Andrew Jones, Chief Executive of LondonMetric, commented:

“This asset has performed strongly, delivering an ungeared IRR of 15 per cent pa. We will recycle the proceeds into our pipeline of investment and development opportunities, particularly in urban and regional logistics where we continue to see value and good prospects for further rental growth.”

Tritax Big Box REIT plc was advised by DTRE.

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