Investment Case

Investing in the right areas of real estate

Our £1.5 billion property portfolio is invested in areas of the UK market that offer good prospects for income and value growth. The portfolio is focused on retailer-led real estate that meets occupiers’ needs and is relevant in a rapidly evolving retail environment. We remain disciplined in our asset selection, leveraging our retail expertise and strong relationships.

Core focus on distribution

At £0.9 billion, the size of the distribution portfolio has grown significantly over the last two years. We recognised early on that changes in the way consumers shop and online retail would make distribution a critical element of a retailer’s property strategy. Retailer demand for distribution space remains high and, with limited supply, creates good demand/supply dynamics and prospective returns.

Strong portfolio metrics

The portfolio metrics reflect the strength of our assets. At 13 years, the average lease length is one of the longest in the listed real estate sector and, with only 1% of income set to expire within three years, this gives us certainty of income. An occupancy rate of 98.5% demonstrates strong occupier contentment and desirability of the asset base.

Income generation

LondonMetric operates a total return model and income is a key component of this, particularly at a time when real estate has already benefitted from significant capital returns from market yield compression.

Value growth

Our focus is on growing, strengthening and lengthening our income and creating assets that are are well positioned for the future. Short cycle pre-let developing compliments our income focus and delivers attractive yields on cost In Full Year 2016 we delivered 1.9m sq ft of development and expect to deliver 1.2m sq ft in Full Year 2017.

Experienced and aligned management team

The management team has deep retailer relationships and extensive property backgrounds. They are opportunistic, entrepreneurial and have a strong alignment of interest with shareholders through their shareholdings in LondonMetric.

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