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Stenprop captures rental growth in industrial portfolio

Stenprop has reported a 25% average uplift on new industrial lettings in a trading update for the fourth quarter of 2020.

The group said the 39 lettings made during the period and the 18 lease renewals were 25% and 24% ahead of previous passing rents and totalled £1.51m of rent per annum.

Like-for-like passing rent across the portfolio was up 0.8% in the quarter and up 3.6% over 12 months.

Occupancy across its multi-let industrial portfolio was stable at 93.1% (September 2020 : 93.3%).

The group has seen users on its lettings platform (industrials.co.uk) increase 2.2% over the quarter. Year on year, users have increased 68%.

Despite total leads being down 8% for the quarter (mainly due to the second wave of Coronavirus), 70 lease transactions were under offer on 243,000 sq ft of space, outperforming the previous quarter (49 deals on 208,000 sq ft).

In the first three weeks of January, average weekly enquiries were 80% higher than the previous quarter and has led to over 96,000 sq ft of additional leasing transactions being placed under offer in January.

Stenprop said rent collection for the current quarter was on course to equal or beat previous collection rates since the start of the pandemic. It has previously reported collection rates of over 90%.

Portfolio re-shaping

The company continued its transition to becoming fully focused on the UK multi-let industrial sector with £37m of new acquisitions and the sale of £51m worth of German retail assets during the quarter.

When all the deals complete, the portfolio is expected to be 72% weighted to UK multi-let industrials.

New debt profile

During the quarter, Stenprop completed two debt refinancings that reduced the average cost of senior debt secured on its UK industrial portfolio from 3% to 2%, equating to an interest saving of around £1.3m per annum on a like for like basis.

At 31 December 2020 the groups’ loan to value (LTV) was 40% on drawn facilities, and around 35% when allowing for free cash.

STP : Stenprop captures rental growth in industrial portfolio

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