LondonMetric Property PLC (LSE:LMP) said it sold a grocery asset in Liverpool for £10.2mln, reflecting a net initial yield (NIY) of 4.65%.
The company bought the 29,000 square feet asset for £8.1mln in 2014. It is let to M&S and Aldi and generates a rent of £0.5 million a year and has a weighted average unexpired lease term (WAULT) of 12.6 years.
LondonMetric said the sale price is line with the 31 March 2021 book value and crystallises a 26% profit on cost and an ungeared internal rate of return (IRR) of 9%.
"This asset was one of our first grocery acquisitions and has delivered a strong return. The sale demonstrates the strength of demand for long let income, particularly smaller format grocery," said LondonMetric chief executive Andrew Jones.
On Thursday, LondonMetric announced that it had acquired an urban logistics warehouse in Cardiff for £11.1mln, reflecting a blended NIY of 5.0%.
The 119,000 square feet warehouse is let to Global Life Sciences Solutions, trading as Cytiva, on a new 10-year lease with RPI-linked rent reviews of between 1% and 3%. The property generates a rent of £0.6mln a year with the contractual rent reviews expected to increase the purchase net initial yield to 5.8% after five years, LondonMetric said.
"We continue to recycle capital from our disposal activity into high quality assets that will enhance our urban logistics portfolio. This property is let to a highly reputable occupier, offers attractive income growth prospects and has further asset management potential," Jones said.