Updated

Updated · Yahoo Finance UK · Aug 15

LondonMetric Property Offers £1,278 ISA Income on £20,000 as Yield Tops FTSE 100’s 3%

Updated

Updated · Yahoo Finance UK · Aug 15

LondonMetric Property Offers £1,278 ISA Income on £20,000 as Yield Tops FTSE 100’s 3%

Q: With dividend cover hovering near the edge, what happens to your tax-free income if a major retail tenant unexpectedly collapses?

If a major retail tenant were to fail unexpectedly, the immediate effect would be pressure on LondonMetric’s rental income and dividend cover, which is already only modest at about 1.08x to 1.1x. That means there is some cushion, but not a large one. A meaningful rent loss, plus any void costs and re-letting delays, could push earnings below the current dividend run-rate and raise the risk of slower dividend growth or, in a more severe case, a cut. For an ISA investor, the income would remain tax-free, but “tax-free” does not mean guaranteed. If the dividend were reduced, the annual cash received on a £20,000 holding would fall accordingly. On the current 6.3% yield, that income is about £1,278 a year; a 10% dividend cut would reduce it to roughly £1,150, and a 20% cut to about £1,020. That said, LondonMetric’s portfolio characteristics reduce the chance that a single tenant failure becomes a major income shock. Occupancy is high at about 98%, rent collection has been near 99.7%, leases are long at around 17 years on average, and many are triple-net structures, which limit cost leakage. The company has also been rotating capital toward stronger occupiers such as Tesco and Lidl and has no major refinancing pressure until 2030. So the key risk is not the loss of tax shelter, but a drop in the amount of income inside it if tenant trouble materially weakens rental cash flow.

1 articles · Updated · Yahoo Finance UK · Aug 15

A £20,000 ISA investment in LondonMetric Property would generate about £1,278 a year tax-free at the REIT’s current 6.3% dividend yield, more than double the roughly £600 from a FTSE 100 tracker yielding around 3%.
That higher income is backed by recent operating gains: since April, LondonMetric has added £6.7 million of annualised rental income from 72 asset-management initiatives, with rent reviews delivering average uplifts of 16%.
Portfolio metrics also improved, with occupancy rising to 98.3%, while the group sold £96.7 million of non-core assets and recycled the proceeds into food retail properties let to tenants including Lidl and Tesco.
The pitch comes as investors seek stronger second-income options during the cost-of-living squeeze, though the report notes dividend yields can change and stock-market risk remains higher than cash ISA savings.

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Yahoo Finance UK5d ago

Investors Target £1,278 Tax-Free Income from £20,000 ISA Investment in LondonMetric Property

Could this REIT's alluring high yield actually be a trap for unsuspecting ISA investors chasing inflation-beating returns?

With dividend cover hovering near the edge, what happens to your tax-free income if a major retail tenant unexpectedly collapses?

How are triple-net leases and supermarket tenants secretly bulletproofing this London property giant against ongoing economic turbulence?

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Center100%

Yahoo Finance UK5d ago

Investors Target £1,278 Tax-Free Income from £20,000 ISA Investment in LondonMetric Property

LondonMetric Property Offers £1,278 ISA Income on £20,000 as Yield Tops FTSE 100’s 3%

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