LondonMetric doubles size of portfolio in first year since merger

4th June 2024 | Jack Oliver

LondonMetric Property has doubled the size of its portfolio to £6bn in the first financial year since merging with LXi.

Over half of the real estate investment trust’s (REIT’s) portfolio contains long-income assets, of which the LXi merger added £2.6bn worth.

Prior to the merger, LondonMetric’s long income exposure mainly focused on convenience retail, with the acquisition of LXi’s properties adding to this. The merger also provided LondonMetric access to the entertainment, budget hotels, and healthcare sectors.

Over the last financial year, comprising the year ending 31 March, the REIT sold £43 million of long income assets and has made further disposals since the year end including some from the LXi portfolio. This included the recent sales of £31m worth of retail assets.

At year end, LondonMetric said its long income portfolio is 100% let, offers a topped up net initial yield of 5.8%, a weighted average unexpired lease term of 24 years, and contractual rental uplifts on 90% of income.

The convenience sector now makes up 17% of the REIT’s portfolio, whilst the entertainment and leisure sectors make up 21%.

LondonMetric said that despite a growth in online shopping, the store network remains integral to retailers, with well located properties let on long triple-net leases to retailers remaining an attractive investment.

The REIT added that roadside convenience has also been an area of focus through drive-throughs as well as the need to service customers with electric vehicle charging points.

LondonMetric also said the consumer trend towards experiences, the recovery in foreign international travel, and greater consumer preferences for staycations has supported favourable growth in certain parts of the UK entertainment and leisure sector.

In addition to the LXi merger, the REIT also completed the acquisition of the CT Property Trust, which it said added £65.1 million of long income assets in the year.

Over the course of the financial year, LondonMetric recorded a net rental income of £177.1m, up from £146.8m the previous year. The REIT reported earnings of £121.6m, up year-on-year from £101.m.

Andrew Jones, chief executive of LondonMetric, said: “This has been a transformational period for our company with the successful execution of two M&A transactions. We have doubled the size of our portfolio to £6 billion, creating the UK’s leading triple net lease REIT and the third largest UK REIT by market capitalisation. Scale and income granularity are increasingly important and our activity has further enhanced our sector leading income metrics with reliable, predictable and exceptional income growth.”


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