LondonMetric Property’s pivot towards city logistics spaces and away from “big box” retail parks has bolstered recent earnings and also netted the investment trust £111.4m in disposals cash.
The real estate investment fund has undergone a shift into “well located long income assets” in the six months to 30 September, just as the urban logistics market began seeing a rise in interest.
LondonMetric said it had benefited from favourable demand and supply dynamics in the six-month period.
However, the market has seen a spike in demand in recent months, as businesses seek to bring their supply chains closer to home post-lockdown and Brexit.
The London-listed firm’s recent activity has focused on space in Birmingham, Halesowen, and London’s Fulham, Stratford and Tottenham – where rents are some 12 per cent higher than the company’s initial expectations.
“Looking ahead, whilst we are living in turbulent times, our strong portfolio metrics, growing income, well managed debt position and high shareholder alignment of interest gives us confidence in our ability to maintain our covered and progressive dividend policy,” the company said in its latest trading statement today, ahead of a financial update next month.
“Whilst the investment market has clearly softened since our year end, we have… a net income yield (NIY) of 4.2 per cent,” the company added.
“This includes completion last week of the £21.6m portfolio disposal of three multi-let industrial estates. Acquisitions, which totalled £99.1m, were largely focused on urban logistics and were transacted at a NIY of 4.3 per cent, which is expected to rise to nearly five per cent over the next few years from rent reviews.”