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LondonMetric Property says distribution space in high demand ahead of Brexit

LondonMetric Property says distribution space in high demand ahead of Brexit
FILE PHOTO: A woman pushes a shopping trolley past Christmas decorations for sale in a Tesco store in Manchester, Britain November 27, 2018. REUTERS/Phil Noble   -   Copyright  PHIL NOBLE(Reuters)
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(Reuters) – Britain’s LondonMetric Property Plc <LMPL.L> on Wednesday said it was seeing more interest from companies for additional distribution space to store products, which could help avoid any disruptions in supply chains ahead of Brexit.

A growing list of companies unsettled by the uncertainty around Brexit have announced plans to stock pile products ranging from drugs, chocolate, tiles and raw materials to parts for the engineering industry.

“There is growing evidence that occupiers are intensifying their search for additional distribution space both to increase near term storage capacity as well as longer term solutions to maximise the efficiency of their global supply chains in a post Brexit environment,” LondonMetric said.

The retail property company, once among the largest landlords in the retail sector’s, also warned of declining values in the retail space.

“Whilst many will point to new opportunities for repositioning, or that pricing is close to the bottom, we believe there is still more value destruction to come as yields expand, more retailers fail and rents fall as the retail ‘survivors’ inherit almost unprecedented pricing power.”

The company said it was reducing its exposure to multi-let properties for general retail stories, adding that it remained attracted to the convenience sector, which was benefiting from a shift in shopping patterns.

LondonMetric’s net rental income rose 5.8 percent to 47.1 million pounds in the six months ended Sept. 30, as a focus on logistics and convenience assets paid off.

Shares of the company were little changed at 187.2 pence in light morning trading.

(Reporting by Karina Dsouza, Arathy S Nair and Tanishaa Nadkar in Bengaluru; Editing by Bernard Orr)

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