LondonMetric Property Plc bought two new warehouses in Bedford and Birmingham worth a total of GBP61.8 million, reflecting a 7.2% combined initial yield.
The warehouse in Bedford was the Argos Distribution Warehouse and located near Asda and Sainsbury's. The Argos warehouse cost GBP51.65 million, reflecting a 7.0% initial yield. The 657,500-square-feet warehouse was Argos' key distribution centre in the country. It handled the home delivery operations of bulky goods and came with an unexpired 9.5-year lease terms. The warehouse will also be subjected to an open market rent review on December 2017.
On the other hand, LondonMetric's Birmingham warehouse was from WH Smith Distribution Unit. The warehouse cost GBP10.1 million, reflecting a 7.9% net initial yield. It measured 211,000 square feet and has an 11-year lease contract. The warehouse in Birmingham was one of three other distribution warehouses used by WH Smith for its UK High Street and Travel Outlet business.
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