REIT Watch: LondonMetric Acquires Retail Warehouse Park in Ipswich, Considers Selling Smaller Assets

on May 13, 2013


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**LondonMetric Buys Martlesham Heath Retail Park as It Narrows Focus to Large-Scale Warehouses**
LondonMetric Property Plc (LON:LMP), a UK-based real estate investment trust created earlier this year through a merger between London & Stamford Property and Metric Property Investments, announced on Monday, May 13, that it had bought Martlesham Heath Retail Park in Ipswich, England from clients of JPMorgan Asset Management. The warehouse purchase price was £10.35 million, reflecting a net initial yield of 6.5 percent. The REIT said in a news release that it would fund the acquisition from existing resources.

Martlesham Heath Retail Park comprises 47,850 square feet across six units, anchored by a new 15,000 square feet M&S Simply Food. There is a 5,000 square feet unit still vacant where letting negotiations are at an advanced stage.
The LondonMetric Chief Executive Officer, Andrew Jones, commented in the news release: “Our acquisition at Ipswich provides an opportunity to leverage on the recent letting to M&S and gives us a platform to materially improve the tenant mix, grow income and increase the rental tone.”

Reportedly, LondonMetric has been considering selling some of its smaller assets. As revealed by The Times on Monday, the UK REIT was in talks to sell a large portfolio of distribution warehouses, in a move to focus its investment mostly on large-scale distribution centres that are let to retailers. According to the report by The Times, LondonMetric was considering selling £275 million of distribution “sheds” across the UK, to Prologis, a U.S. industrial property developer, and Norway’s sovereign wealth fund, Norges Bank Investment Management. The plans had not been confirmed by any of the parties reportedly involved in the talks, The Times noted.

As of 08:29 GMT on May 13, the LondonMetric share price in London was 115.80p, down 0.18 percent from its previous trading day’s closing level.
**Hong Kong**
**Langham Hospitality Sets IPO Price Range**
!m[Langham Hospitality Investments Eyes Up to HK$4.57bn in IPO](/uploads/story/2216/thumbs/pic1_inline.png)
Hong Kong-based Langham Hospitality Investment planned to raise up to HK$4.57 billion (£382 million) in a Hong Kong initial public offering, its parent firm Great Eagle Holdings (HKG:0041) told the IFR magazine on Saturday, May 11. Reportedly, the hotel trust had set a yield for 2013 of 5.65 to 6.5 percent for its Hong Kong IPO of HK$3.96 to $4.57 billion (£332 to £382 million). The listing vehicle would comprise three hotel properties with a combined valuation of HK$17.746 billion (£1.48 billion) located on Hong Kong’s Kowloon peninsula – The Langham, Langham Place Hotel and Eaton.

The IPO, which is expected to kick off in June this year, is one of several deals planned for the coming weeks from companies looking to benefit from demand for commercial property in Hong Kong, according to the Reuters coverage of the news. The newswire has said that the announced pricing could set a benchmark for the coming string of REIT deals in the Asian city-state.
**As of 15:51 HKT on May 13, the Great Eagle Holdings share price in Hong Kong was 0.73 percent down at HK$33.95.**
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