LondonMetric Sells Warehouses to Norwegian Wealth Fund

LondonMetric Property Plc, a real estate investment trust created by a takeover last year, agreed to sell logistics centers in a deal valued at 247.6 million pounds ($379 million) including debt to a company owned by Prologis Inc. and Norway’s sovereign-wealth fund.

LondonMetric would receive 68.3 million pounds after repayment of debt and fees for the 11 warehouse properties with 2.4 million square feet (223,000 square meters) of combined space, the London-based company said in a statement today. The deal’s net initial yield is 6.25 percent, it said.

“This disposal is in line with our strategy to focus on distribution assets in the retail sector,” LondonMetric Chairman Patrick Vaughan said in the statement. “We have a number of investment acquisition opportunities agreed and in solicitors’ hands which will allow us to reinvest.”

Norway’s wealth fund, the world’s biggest, in December agreed to buy half of a European property portfolio from Prologis for 1.2 billion euros ($1.6 billion). Norges Bank Investment Management, manager of the fund, is expanding into real estate with a plan to have 5 percent of the fund’s assets invested in the industry. The deal was its first purchase of industrial property.

LondonMetric was created by a merger of two commercial property companies in a deal announced in November. It owns and rents out commercial and residential buildings in London and retail space in the city’s suburbs. Prologis is a San Francisco-based REIT specializing in industrial properties.