DFS property assets set for £175m sale
THE headquarters of Yorkshire furniture chain DFS, along with 22 retail warehouses, four industrial units and a distribution centre, are to be sold in a £175m deal.
LondonMetric Property announced it has exchanged contracts acquire the portfolio from the administrators of Delphi Properties through a new joint venture it is forming with LVS II Lux, called LMP Retail Warehouse JV Property Unit Trust.
LondonMetric will own 30.5% of the joint venture.
The purchase price of £175m reflects a net initial yield of 9.3% and the deal is expected to complete in March.
The acquisition will be financed with a new debt facility which has been put in place for completion.
Andrew Jones, chief executive of LondonMetric, said: “Our new joint venture with LVS allows us to access both new equity and debt funding whilst leveraging our asset management platform and strong occupier relationships. We aim to grow the attractive day one cash on cash returns as we execute asset management initiatives.
“DFS is the leading UK furniture retailer and one of our strongest retail partners. The portfolio represents high quality trading assets, with 46% of the rental income derived from Open A1 consents. The portfolio is fully rented but contains significant value accretive opportunities. We look forward to working with DFS across the operational portfolio to strengthen and lengthen the sustainable income profile for our mutual benefit.”
Cairn Capital and Savills advised the joint venture on the acquisition; Cairn Capital also advised the joint venture on the debt.
