LONDONMETRIC PROPERTY (LMP) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

Overview of LondonMetric Property (LMP) in 2025

In 2025, LondonMetric Property plc (LSE: LMP), a UK-based real estate investment trust (REIT), continued its focus on income-led strategies and logistics-led portfolios amidst a shifting economic landscape. Investors watching the performance of REITs in 2025 saw LondonMetric as a resilient player in a volatile environment, driven by its diversified property portfolio primarily centred around logistics, long-income assets, and urban warehousing.

Founded in 2007 and known for its data-backed acquisition model, LondonMetric has weathered market turbulence through sharp strategic pivots. In 2025, the firm navigated a UK market still grappling with inflation pressures, interest rate fluctuations, and a gradual normalisation of consumer behaviour post-COVID-19.

Among the notable highlights:

• Share Price: LMP’s share price closed the year with a modest gain of around 4.7%, reflecting mixed market sentiment and resilience in logistics.
• Dividend Strength: The REIT maintained an attractive dividend yield above 5%, continuing its reputation for income consistency amid sector pressures.
• Portfolio Performance: The logistics segment outperformed other sub-sectors, contributing significantly to rental growth and valuation stability.
• Occupancy & Rent Collection: The company upheld near-full occupancy rates while boasting 98% rent collection, a metric aligning with sector leaders.

LondonMetric’s ability to reposition itself as a logistics-focused REIT has been central to its continued performance despite the uncertain macroeconomic backdrop of 2025. The acquisition of CT Property Trust in 2023 also began showing synergistic benefits during this year.

In the broader context, the 2025 performance captures how investors have sought safe havens within yield-generating assets like REITs, especially those with a long-term lease profile and minimal void risk. As with most real estate investments, the interplay between interest rates and asset valuation influenced investor appetite significantly.

What drove LMP’s share trajectory in 2025?

Several key macro and company-specific factors shaped LondonMetric Property’s share performance in 2025. Understanding these drivers provides insight into potential movements in 2026.

1. Logistics Demand & Tenant Mix

The firm’s logistics portfolio — constituting over 70% of its holdings — enjoyed continued tenant demand, driven by e-commerce recovery and supply chain optimisation. Occupiers across food distribution, pharmaceuticals, and third-party logistics providers expanded footprints, supporting LMP’s rental growth trajectory.

Additionally, long WAULT (weighted average unexpired lease terms) across critical properties shored up earnings and attracted income-focused investors navigating volatile equities.

2. Acquisition Strategy & Integration

Post-2023, the assimilation of CT Property Trust contributed positively within the merged logistics-heavy vehicle. Asset re-balancing and property disposals created efficient capital recycling, enhancing operating margins.

This ongoing strategy bolstered market sentiment toward LMP as a disciplined capital allocator. It enabled it to rotate out of lower-yield or structurally challenged retail properties and reinvest in long-term logistics and urban assets.

3. Interest Rates and Cost of Capital

While interest rate increases from the Bank of England posed challenges, UK REITs with robust balance sheets — including LMP — fared better. The ability to issue debt at favourable spreads and long maturities, alongside a focus on hedging strategies, minimised financing risks.

Debt levels remained within comfortable bounds, with a loan-to-value (LTV) ratio under 35%, well below the sector average, supporting investor confidence.

4. ESG Integration and Portfolio Standards

Environmental initiatives contributed to long-term asset appeal. LondonMetric retrofitted and upgraded numerous sites to meet EPC regulation thresholds. Green leases gained traction, keeping properties compliant and attractive for ESG-conscious tenants and investors.

5. Market Rotation and REIT Sentiment

Growth-to-value rotation saw investors favour dividend-paying instruments after a tough tech-driven 2023. REITs caught tailwinds, and LMP, being relatively insulated from volatile retail or office segments, absorbed capital inflows steadily.

Institutional allocation increased as pension schemes and wealth managers sought indexed income. Despite headwinds, this underpinned LMP’s steady upward share movement in H2 2025.

Challenges and opportunities for LMP in 2026

Heading into 2026, LondonMetric Property faces a milieu of opportunities and potential risks. A forward-looking lens reveals the external and internal forces likely to shape performance.

1. Interest Rate Expectations

Monetary policy remains a critical determinant for property shares. Economists forecast gradual rate reductions by mid-2026 based on inflationary cooling. A downward shift may catalyse REIT valuations as debt refinancing becomes cheaper and investor demand rises.

Nonetheless, should inflation re-accelerate due to wage growth or geopolitical shocks, tightening cycles could resume, applying pressure on REITs like LMP through higher financing costs and asset re-pricing.

2. Capital Recycling Execution

The REIT’s ability to dispose of mature assets and reinvest in growth-aligned properties will influence NAV (net asset value) and income profile. Delays in planning consents or a sluggish buyer pool could reduce transaction efficiency, restricting capital deployment pace.

Efficient recycling remains one of the primary levers to unlock value and differentiate LMP from passive REIT alternatives.

3. E-Commerce Recalibration

Market analysts anticipate continued evolution in last-mile logistics demand. Consolidation among e-commerce operators and reconfiguration of delivery networks are expected to reshape spatial requirements. LMP's exposure to urban warehousing positions it well, though agile asset management will be needed to capture emerging tenant requirements.

4. Regulatory and Tax Changes

Chancellor-led policies on tax reliefs and real estate VAT treatments could affect cost structures for developers and investors. Any changes to business rates or capital gains margins in the Spring Budget 2026 may have sector-wide implications. Maintaining yield and return resilience in such an environment will require proactive operational response.

5. ESG Compliance and Transition Risks

With ESG regulations tightening, REITs across the UK, including LMP, must continue investing in decarbonisation paths and reporting transparency. Brexit-linked divergence in disclosure standards vs EU counterparts might elevate compliance costs or investor confusion, influencing asset pricing marginally.

Key Developments to Monitor in 2026:

• Potential new acquisitions focused on urban infills and data centres
• Divestments from legacy retail or underperforming assets
• Dividend adjustments linked to rental income stability
• Technology investments in tenant management platforms
• Further alliances or REIT mergers similar to past integrations

Investors should also track LMP’s quarterly updates, NAV movements and any shifts in tenant liquidity within their warehousing and logistics segments.

While share performance will continue to be tied to bond yield trends and institutional demand, LMP remains positioned strongly — especially if macroeconomics tilt in favour of yield and downside protection assets in H2 2026.