LondonMetric completes mega merger with asset disposals
LondonMetric has completed its merger with LXi REIT, to create a portfolio worth £6.2bn.
The new business has become the UK’s fourth-largest real estate investment trust which spans logistics, healthcare, convenience, entertainment and leisure.
CEO Andrew Jones said LondonMetric’s focus will now be on repositioning parts of the portfolio, with a keen eye on logistics.
As the merger completed today, the firm announced a series of acquisitions and disposals which see its total number of assets sold in this financial year reach £184m.
LondonMetric has purchased a logistics development in Crewe, in an off-market deal worth £13m. Located on a 20-acre site at Radway Green the former home of BAE Systems, the scheme consists of five units ranging from 18,000 to 60,000 sq ft.
The developer Marshall CDP will take a three-year leaseback of the site and pay a rent of £1.5m per year and upon letting of the development, LondonMetric will pay CDP an overage payment.
Elsewhere, the firm has sold two non-core assets for £5.9m: a 37,000 sq ft B&Q unit in Burnley let for a further seven years and acquired as part of the CT Property Trust portfolio in August 2023; and a 20,000 sq ft vacant office in Halesowen acquired as part of the Mucklow portfolio in 2019.
Andrew Jones, Chief Executive of LondonMetric 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.
“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”.
