LondonMetric completes ‘transformational’ merger with LXi
LondonMetric has completed its merger with LXi and appointed Nick Leslau as a non-executive director of the business.
The merger, which was confirmed at the beginning of 2024, creates a REIT with a market capitalisation of £4bn and a combined portfolio of more than £6bn focused on logistics, healthcare, convenience, entertainment and leisure.
Across the portfolio, the REIT boasts a WAULT of 19 years on FRI leases and a 99% occupancy rate.
LondonMetric has completed its merger with LXi and appointed Nick Leslau as a non-executive director of the business.
The merger, which was confirmed at the beginning of 2024, creates a REIT with a market capitalisation of £4bn and a combined portfolio of more than £6bn focused on logistics, healthcare, convenience, entertainment and leisure.
Across the portfolio, the REIT boasts a WAULT of 19 years on FRI leases and a 99% occupancy rate.
LondonMetric chief executive Andrew Jones said: “The merger is a transformational deal that creates the UK’s leading triple net lease REIT with full occupancy and exceptional income longevity and certainty of income growth.
“The new larger business will deliver better liquidity, material economies of scale, substantial cost savings with improved terms in both debt and equity markets. Our enlarged balance sheet will also allow better access to new opportunities of scale, which will drive accelerated earnings and dividend progression.”
The business also this morning announced that it bought a 213,000 sq ft logistics development at Radway Green in Crewe for £13m in an off-market deal. The development is located on a 20-acre plot and provides five units from 18,000 sq ft to 60,000 sq ft.
Developer Marshall CDP will take a three-year leaseback of the site and pay a rent of £1.5m, reflecting a net initial yield of 11%.
Upon leasing of the development, LondonMetric will pay CDP an overage payment based on a fixed percentage of the difference between the initial purchase price and open market value. Based on a market rent of £1.8m pa, LondonMetric said it expected to achieve a yield on cost of 8%.
The firm has also sold two further non-core assets from its portfolio for £5.9m, a 5% premium to their 31 December valuations. The assets comprise a 37,000 sq ft B&Q unit in Burnley let for a further seven years and a 20,000 sq ft vacant office in Halesowen.
LondonMetric has sold £184m of assets in its 31 March 2024 financial year.
Jones added: “As evidenced by today’s update, we will continue to reposition parts of the portfolio with an emphasis on growing our exposure to logistics which remains our strongest conviction call and is delivering high organic rental growth.
“We are also seeing interesting investment opportunities arising from debt refinancings and fund redemptions and the acquisition announced today is an excellent example of an innovative transaction that leverages our strong relationship with the developer and offers an attractive return profile.”
LondonMetric will announce its full-year results on 4 June.
