London & Stamford Property has made its first investment of 2010 with the acquisition of a freehold distribution unit in Tamworth, UK. In a statement on Monday, the company said that it has exchanged contracts with Clerical Medical Investment to buy the asset for £33.3 mln (EUR 38 mln), reflecting an initial yield of 9.5%.

The 584,632 sq ft (54,000 m2) unit is let to Focus DIY for a further 14 years and operates as its national distribution centre. 'The centre is exceptional by virtue of its size and prime location as Focus's sole distribution centre,' said Raymond Mould, non-executive chairman of L&S.

He added: 'L&S has again proven that it can respond quickly to attractive investment opportunities yielding a cash return of 9.5% and reflecting a price below the replacement cost of the unit.' The acquisition has been made entirely out of cash reserves, but the company will consider applying leverage in the future, according to Mould.

L&S Property is a closed-ended investment company based in Guernsey and advised by LSI Management. Founded in October 2007, the company raised £247.5 mln of equity through a placing in November 2007 and obtained a five-year credit facility with Bank of Scotland for £150 mln.

Last year, L&S made six new investments using £190 mln of equity and raised £225.8 mln of equity in July.