12th Mar 2014 07:49
LONDON (Alliance News) - LondonMetric Property PLC Wednesday said it has exchanged contracts to acquire the Marks & Spencer distribution centre in Sheffield for GBP32.2 million from clients of CBRE Global Investors, reflecting a net initial yield of 7.6%.
In a statement, the company said the buy will be funded from its existing resources.
The distribution centre is made up of two units totalling 625,900 square feet. M&S recently signed a new 10 year-lease expiring in November 2023, with a tenant break option on unit 2 after five years. The retailer has made a commitment to invest in the site as part of a drive to improve its logistics portfolio, LondonMetric said.
However, one of the units could be affected by the second phase construction of the new high speed rail link between London and the North West, although the exact route of the new track has yet to be finalised and works won't start until 2023.
"LondonMetric will now actively engage, alongside M&S, on discussions over the exact routing of phase 2," the company said in a statement.
Following this acquisition, the LondonMetric distribution portfolio comprises 12 distribution centres with a combined value of GBP294.0 million.
"This purchase reflects a very attractive initial yield that delivers attractive cashflow to the Group, as well as strengthening our relationship with one of the UK's leading retailers. The asset offers excellent asset management opportunities to work with M&S to secure their long term occupation of the property," Chief Executive Andrew Jones said in a statement.
By Steve McGrath; [email protected]; @SteveMcGrath1
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