LondonMetric Property rebalances real estate portfolio

UK REIT LondonMetric Property reported that it has made significant progress in selling off non-core assets.

Andrew Jones

The company disposed of 57 properties for £318 mln (€371 mln) at a net initial yield (NIY) of 5.7% and a weighted average unexpired lease term (WAULT) of 12.5 years. These sales matched their book values and included 41 former LXi REIT and ULR assets, generating £171 mln (€199 mln). In total, the company has now sold 72 LXi REIT assets for £298 mln (€348 mln) and 17 ULR assets for £55 mln (€64 mln).

Recent disposals include 20 assets sold for £57 mln (€66 mln), consisting of 11 urban logistics properties (mostly former ULR assets), five Travelodge hotels, and four convenience/DIY assets.

On the acquisition front, LondonMetric made 35 direct investments totaling £333 mln (€389 mln) during the year, with a WAULT of 33 years and an initial yield of 5.5% (rising to approximately 6.1% over five years). This is in addition to £1.2 bn (€1.4 bn) in assets acquired through mergers and acquisitions. Recent acquisitions include four modern Premier Inn hotels for £47.8 mln (€56 mln), a logistics unit in Greater Manchester for £12.1 mln (€14 mln), and other assets totaling £19.1 mln (€22 mln), including the Crown Plaza hotel at Manchester Airport.

LondonMetric has also actively managed its finances, refinancing £1.5 bn (€1.7 bn) of debt, raising £1.2 bn (€1.4 bn) in new debt, and repaying £1.1 bn (€1.3 bn).

Andrew Jones, chief executive of LondonMetric, commented: “Despite macro uncertainty, volatile bond yields and reduced liquidity, we have continued to improve the quality of the portfolio with some excellent disposals and acquisitions. “Our all-weather portfolio continues to deliver excellent income growth as we benefit from our alignment to the winning sectors. We are reaping the rewards of this strategy, and it is wonderfully comforting to see our rental income flowing and growing to record levels. This continued income compounding is enabling us to deliver our eleventh consecutive year of dividend progression."