London & Stamford in JV with Anglesea Capital buy Radial portfolio for £208.5 million - net intial

Published: 14th May 2010
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London & Stamford Property, the AIM- listed property investor, today announced that it has exchanged contracts with Warner Estate Joint Ventures Limited and Uberior Ventures Limited to acquire Radial Distribution Limited ("Radial") for £208.5million (excl. costs).

The Radial portfolio consists of 16 prime distribution warehouses totalling 3.4m sq ft (total site area of 165 acres), in prime locations across the UK. Of the 16 units, 13 are located in the Midlands and one in Scotland, the South East and the South West.

There are 13 tenants in total, including Tesco PLC, Travis Perkins plc, Eddie Stobart Limited, Kuhne & Nagel and Northrop Grumman. The portfolio has a weighted average unexpired lease term of 6.23 years. The current passing rent of the portfolio is £17.36million per annum from 14 of the 16 units. There are currently two vacant units and once fully let the portfolio is expected to produce an annual rental income of £18.91million, which equates to a property net initial yield of 8.75%.

The transaction will be financed out of existing cash resources and using the debt available under London & Stamford's existing £150million loan facility with Bank of Scotland. This will generate an equity yield of 15.30% initially rising to 18.5% once full letting is achieved.

London & Stamford will hold a 94% interest in Radial, with Anglesea Capital holding the remaining 6%. Anglesea Capital is a distribution sector specialist and will work closely with LSI as asset manager of the portfolio. It was set up in June 2009 by Rhys Lewis, former principal and head of UK at Rockpoint and already owns a £260 million portfolio in a joint venture with Rockpoint.

Raymond Mould, the Non-executive Chairman of London & Stamford Property, said:

"We are delighted to have made this excellent acquisition for London & Stamford alongside its joint venture partner Anglesea Capital. The portfolio represents exceptional value and combines prime quality assets in prime locations, good tenant mix, secure income and an attractive cash on equity return."

M3 and Savills acted for both London & Stamford Property Limited and Anglesea Capital.

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