LondonMetric Property has sold the Queens Drive Retail Park grocery asset to an unnamed buyer on a deal that reflects a net initial yield of 4.65%.
According to LondonMetric, the 29,000 sq ft West Derby unit generates a rent of £500,000 per year from current tenants Marks & Spencers and Aldi. The space has a weighted average unexpired lease term of 12.6 years.
LondonMetric purchased the property for £8.1m in 2014. The company said that the £10.2m sale price is on par with the property’s March 2021 book value. The sale grants LondonMetric an ungeared internal rate of return of 9% and a 26% profit on cost.
“This asset was one of our first grocery acquisitions and has delivered a strong return,” said Andrew Jones, chief executive of LondonMetric. “The sale demonstrates the strength of demand for long let income, particularly smaller format grocery.”
Fawcett Mead advised LondonMetric on the deal, while Morgan Williams represented the buyer.