LONDON—LondonMetric Property Plc, a UK REIT, has exchanged on the acquisition of Martlesham Heath Retail Park, Ipswich from clients of JPMorgan Asset Management.

The purchase price is $15.8 million (£10.35m) (net of acquisition costs) reflecting a net initial yield of 6.5%. The acquisition will be funded from existing resources.

The project comprises 47,850 sq ft across six units, anchored by a new 15,000 sq ft M&S Simply Food. There is a 5,000 sq ft vacant unit where letting negotiations are at an advanced stage. On conclusion of this letting the yield will rise to 7.4%.

The recent M&S lease was agreed at $38 (£25) psf compared to an average rent on the park of $18 (£12) psf prior to M&S joining. The weighted average unexpired lease term is 11.2 years and occupancy by income is 86%.

Following the acquisition at Ipswich, the LondonMetric retail investment portfolio will comprise 32 assets with a combined value of approximately $527 million (£345m), representing 32% of the enlarged LondonMetric portfolio. The retail portfolio's occupancy is 98%, with an average passing rent of $25 (£16.20) psf and a long weighted average unexpired lease term of 11 years (10.2 years to first break).

Separately, at its shopping park development in St Austell, Cornwall, LondonMetric has exchanged terms with M&S for a new 50,000 sq ft full-line general merchandise store incorporating Simply Food. A planning application for the entire 158,000 sq ft proposed development has been submitted and is expected to be determined later this year. The scheme is also anchored by a 68,000 sq ft Sainsbury food store.

“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,” said Andrew Jones, chief executive of LondonMetric.

“Our St Austell development now benefits from two strong pre-lettings to both Sainsbury's and M&S, and we remain confident of bringing more new retailers to St Austell.”