The UK has too many shops. At least that's the conclusion drawn by LondonMetric Property (LMP) chief executive Andrew Jones. It explains why the company has spent the last few years transitioning away from pure retail property and towards what it calls "distribution assets" - put simply, warehousing and logistics buildings. These kind of assets now make up 64 per cent of the company's portfolio and the group is on track to meet its target of 70 per cent by the end of FY2018.
This investment in distribution is driving good growth at LondonMetric, aided by a long average lease length of 12.8 years and an occupancy rate of 99.6 per cent at the year-end. Net rental income showed a 5 per cent improvement to £82m and the group also enjoyed a £148m cash windfall from the sale of various retail, leisure and residential assets. Another £42m worth has been sold post period-end. Finally, a second-half portfolio revaluation surplus of £44m resulted in property portfolio gains of £21m for the year.