Warehouse REIT is considering an equity fundraise to capitalise on a pipeline of acquisitions as its portfolio proves resilient against covid-19.
The group said it was engaging with existing and potential new investors ahead of a potential equity raise, after aborting a fundraise in March as the pandemic took hold.
However, the company said it was well placed to continue to navigate short-term market disruption, having collected 94% of rents for the current quarter, and sees “potential for further market rental growth, continued value creation through asset management and an attractive acquisition pipeline”.
Prior to the onset of covid-19, Warehouse REIT had identified a significant pipeline of acquisitions, much of which is still in place with some assets now at potentially more attractive values. Several new opportunities have also emerged during the pandemic, it added.
The pipeline amounts to around £350m, of which over £100m are in exclusive or final negotiations or have solicitors instructed and around a further £250m are in detailed negotiations.
The group made the announcement in fully year results to the end of March 2020 in which the value of its portfolio increased by 2.5% on a like-for-like basis to £450.5m. The valuation of the same portfolio at 31 January 2020 was £454.9m, a like-for-like increase of 4.1% on 31 March 2019, but fell in value due to the uncertainty caused by covid-19.
The group’s net asset value (NAV) fell slightly, from 109.7p per share to 109.5p per share reflecting the costs of acquisitions and the dilutive impact of the April 2019 share issue, as well as capital expenditure on asset improvements and the impact of covid-19 on the year-end portfolio valuation.
EPRA earnings per share was 6.3p for the year, covering a total dividend for the year of 6.2p.
The company said it was continuing to target a total dividend per share of 6.2p for the year ending 31 March 2021 but will monitor this as the impact of covid-19 is better understood. It intends to declare the dividend for the first quarter of the year ending 31 March 2021 in August 2020.
Warehouse REIT had bank debt of £186.5m at the year end, resulting in a loan to value ratio (LTV) of 40.2%, at the upper end of its target range. It said it will manage this below 40% through disposals of a small number of non-core assets.
WHR : Warehouse REIT considers fresh fundraise as portfolio holds up against covid-19