LONDON (ShareCast) - (Sharecast News) - LondonMetric Property has exchanged on the sale of its distribution warehouse in Thrapston, Northamptonshire, to EQT Exeter for £102m, it announced on Monday, reflecting a net initial yield of 4.1%.
The FTSE 250 real estate investment trust said the 785,000 square foot warehouse was let to Primark for another 11 years at a rent of £4.4m per annum.

It acquired the property in 2013 for £60.5m, reflecting a net initial yield of 6.4%, and since acquisition it had delivered a total return of 123% and an ungeared internal rate of return of 12%.

Completion of the sale would take place in February, generating an additional £2.2m of income, with total proceeds 8% above the 31 March book value.

LondonMetric said it was retaining its other Primark logistics warehouse, which totals 1.1 million square feet and was let for a further 19 years.

On completion of the sale, the portfolio's weighting towards mega distribution would fall to 10% from 13%, and its rental income exposure to Primark would fall to less than 5%, from 8%.

"This is a very good asset that has performed strongly, delivering a total return of £76m since acquisition," said chief executive officer Andrew Jones.

"The sale price achieved reflects a very competitive bidding process and highlights the depth of demand for well let logistics assets delivering reliable, repetitive and growing income."

At 0841 BST, shares in LondonMetric Property were up 1.24% at 262.2p.

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