Less than two years after it acquired a Buckinghamshire retail park as part of the “Saturn Portfolio” sell-off, out-of-town shopping and distribution investor LondonMetric Properties (LMP) has flipped the site in a £21.8m sale.
Within hours it had invested an undisclosed sum in the purchase of a 37-acre Bedford Borough Council-owned site, currently zoned for distribution. Although contracts have been exchanged, the purchase is conditional on LMP getting the necessary planning consents.
In the first deal, it sold Cairngorm Retail Park to Royal London Asset Management. The FTSE 250 listed company purchased the 57,400 sq ft complex in January, 2013, as part of a package of six regional shopping parks. Producing an average square-foot rental of £24.50, Cairngorm’s anchor tenants include furniture and soft fittings businesses DFS, Oak Furnitureland, ScS, Furniture Village and Carpetright.
Seventeen miles away in Bedford, its newly acquired brownfield site on the A421 is capable of accommodating up to 750,000 sq ft of warehousing and logistics space. LMP says it intends to submit a planning application by the summer of 2015. If consent is granted by the end of the year all construction should be completed early in 2017.
“These transactions are further evidence of our strategy to recycle capital out of assets where we have completed our business plans and invest the proceeds into opportunities where we can use our extensive property skills to deliver future value to shareholders,” explained LondonMetric chief executive, Andrew Jones.
“Following the recent sale of our Bishop Auckland development, the Bedford acquisition replenishes our development pipeline and provides us with the opportunity to create a high quality scheme opposite our existing Argos distribution centre,” he added.
LMP’s latest brace of deals follows a robust first-half performance during which much of its focus was on repositioning its property portfolio away from London offices and housing and into the retail distribution sector — a shift in line with retailing trends toward “click and collect” strategy.
Commenting on its £69.7m profit for the six months to the end of September — up from £44.1m a year earlier — chairman Patrick Vaughan said: “The last six months have continued to benefit from significant equity flows into the UK real estate sector as liquidity has continued to return to nearly every part of the market.”
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