Warehouse REIT expanding apace – The UK specialist warehouse investor, Warehouse REIT (WHR), has announced interim results covering the six-month period to 30 September 2019.
Results breakdown (notes around these figures can be found in the official release):
| Six months to | 30 September 2019 | 30 September 2018 |
| Revenue | £13.6m | £10.7m |
| Operating profit before gains on investment properties | £9.7m | £5.0m |
| IFRS profit before tax | £2.8m | £11.0m |
| IFRS earnings per share | 1.2p | 6.6p |
| EPRA earnings per share | 3.0p | 1.8p |
| Adjusted earnings per share | 3.0p | 3.1p |
| Dividends per share | 3.0p | 3.0p |
| Total accounting return | (1.4)% | 6.5% |
| Total costs ratio | 26.5% | 28.9% |
| As at | 30 September 2019 | 31 March 2019 |
| Portfolio valuation | £438.7m | £307.4m |
| IFRS net asset value | £252.7m | £182.3m |
| IFRS net asset value per share | 105.2p | 109.8p |
| EPRA net asset value per share | 105.2p | 109.7p |
| Loan to value ratio | 40.2% | 39.7% |
Tenants include Amazon and John Lewis
WHR’s chairman, Neil Kirton, discussed some the company’s expansion, key tenant and asset management highlights over the period:
“At the start of April 2019, we raised gross proceeds of £76.5m through a successful equity issue. Together with our extended debt facilities, this provided us with around £120m of firepower. We felt that there were opportunities to advantageously deploy these funds and we have done this within the six month period anticipated at the time of the equity raise. During the period we acquired 25 units in attractive locations across the UK, increasing the Midlands weighting with towns such as Northampton and enhancing the portfolio with tenants such as John Lewis Partnership, Direct Wines and Amazon. Acquisition prices remain below replacement cost and the purchases in the period reflected a blended NIY of 6.7%.
In my previous reports, I indicated that the board would very carefully monitor any macroeconomic developments that may be relevant to your Company and we continue to do this. The short end of the yield curve has inverted during the last 12 months and some commentators see this as a sign of impending recession. We remain extremely vigilant about tenant risk and review this in detail at each board meeting. Our ten largest tenants now provide 28% of our rental income and include excellent covenants such as John Lewis, Amazon, Direct Wines, Alliance Healthcare, Iron Mountain and Howdens Joinery. Another example of the strength of our tenant line up is the fully-let eight-asset portfolio we acquired in September 2019, which has 100% of its income secured against D&B-rated minimum-risk covenants. At the same time, we benefit from the diversity of our tenant mix, which includes 638 occupiers in numerous different sectors, meaning we are not reliant on any individual tenant for the security of our income.
The asset management highlight for the period was re-letting our unit in Basingstoke to Alliance Healthcare (part of Walgreens Boots Alliance) on a new ten-year lease without a break, at a 42.3% uplift to the previous rent. This demonstrates our ability to work with our tenant partners to secure deals that benefit both them and us. More broadly, we achieved rental levels above ERV for new leases, while the length of leases continues to increase, reflecting occupier demand for space and the improvements we are making through capital expenditure.”
WHR: Warehouse REIT expanding apace