Real estate investor LondonMetric Property (LMP) gained 1.3% to 230.8p as it continued its investment in the logistics/warehousing space with the acquisition of two sites in London and Redditch for a combined £13.2 million.
The company has been steadily increasing its exposure to this booming sector of the property market, boosted by a shift online which has been accelerated by the pandemic, for several years.
This has included through the £415 million acquisition of A&J Mucklow in 2019. Breaking down these latest deals, the warehouses are let for 15 years and benefit from RPI linked rent reviews.
They encompass a 20,000 square foot urban warehouse for £7.7 million in London and a newly developed 46,000 square foot urban warehouse for £5.5 million in Redditch.
Numis analyst Robert Duncan continues to see strong prospects for this part of the real estate market, commenting: ‘Catalysed by Covid and Brexit, the UK logistics market continues to go from strength to strength: take-up in 2020 set new records and availability has hit a new low, with a particular acceleration seen over the last six months.
‘With occupational demand expected to remain deep and broad-based in 2021 given the sustained rise in ecommerce penetration and the ongoing importance of supply-chain efficiency, further rental growth and, in turn, yield compression, look likely.’