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LondonMetric Property Plc - Proposed Placing to Fund Acquisitions

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LONDONMETRIC PROPERTY PLC

("LondonMetric" or "the Company")

PROPOSED PLACING TO FUND FURTHER DISTRIBUTION AND LONG INCOME ACQUISITIONS

LondonMetric Property Plc, today announces a placing to raise gross proceeds of approximately £100 million (the "Placing") through the issue of approximately 56 million   new Ordinary Shares (the "Placing Shares") representing approximately 6.7 per cent. of the Company's issued share capital. The Company intends to use the net proceeds of the Placing (the "Net Proceeds") to fund further distribution and long income acquisitions.  

Highlights

  • Proposed Placing to raise approximately £100 million of gross proceeds
  • The macro backdrop and the global search for income is creating an environment that is highly supportive for the right real estate that can generate long and strong income. The Company continues to actively execute on attractive long term investment opportunities alongside a high expectation of finding additional and compelling opportunities in the near term

The Placing will enable the Company to:

  • take advantage of these opportunities by funding its current deal pipeline within  structurally supported sectors of urban logistics and long income, offering greater exposure to attractive returns from these sectors whilst maintaining a strong balance sheet; and
  • further improve the length, strength, quality and granularity of its income 

The Company intends that the Net Proceeds will be used to fund existing deals which are set out below ("Investments"), as well as other potential pipeline opportunities:  

Approximately £60 million used to acquire a long income portfolio comprising five assets:

  • In legals on a sale and leaseback with a convenience/online operator,  on a "principal to principal" basis with exclusivity
  • New 20 year lease with CPIH indexation
  • Excellent real estate in strong locations with extremely high occupier contentment

Approximately £10 million used to acquire a London focussed sale and leaseback portfolio which is in legals

Approximately £30 million for the purchase of an identified pipeline of opportunities which are in discussions and comprise an urban logistics warehouse in London and a sale and leaseback portfolio. Furthermore, the Company has very recently completed the acquisition of a £3.2 million London urban logistics property let to a parcel operator

With this strong programme of Investments and opportunities in place, the Company expects to substantially deploy the Net Proceeds within three months

The Company's progressive dividend policy remains unchanged and it expects to pay a fourth quarterly dividend to shareholders of 2.3 pence per share to be declared at the time of the Company's results for the year to 31 March 2020 and paid in July 2020. This increases the dividend for Full Year 2020 to 8.3 pence (2019: 8.2 pence). Investors participating in the Placing will be eligible for the fourth quarterly dividend

Investors should read this announcement in conjunction with the trading update released on May 2020

Andrew Jones, Chief Executive Officer of LondonMetric, commented:

" We are continuing to operate against an unprecedented economic and social backdrop which is accelerating a number of trends that were already disrupting established practices. This is having a profound effect on real estate as performances across the sectors continue to polarise. The structural trends towards online and convenience that have underpinned our conviction calls into logistics and long income are set to accelerate, as many temporary shopping behaviours become more permanent with changes that were expected to take years now occurring within months.  

"Against this backdrop, our portfolio remains well positioned and has continued to perform strongly as borne out by our high rent collection and continued dividend payments. These uncertain times are starting to give rise to quality investment opportunities that are seldom available in a normalised market. Through our occupier relationships we have identified some excellent assets, at attractive pricing, which would further strengthen our portfolio's long term income characteristics. Not only do we expect to see further opportunities arise but also we expect the pitch to be much less crowded than before."