Stenprop makes letting progress

Stenprop, the UK multi-let industrial (MLI) property company, recorded a record quarter for leasing in the first quarter of 2021.

The group completed 50 new lettings in the period (39 previous quarter) and 33 renewals (18 previously) worth £1.54m of annual rent. New lettings were at a 24% average uplift on the previous passing rent, while lease renewals were at a 15% uplift (20% average across both).

More than three-quarters of leases signed (78%) included at least 3% annual uplifts in rent throughout the term of the lease. Like-for-like passing rent was up 1.8% during the quarter (previous quarter: 0.8%) and up 5.6% over 12 months.

The average rent on its portfolio is now £5.46 per square foot (previous quarter: £5.38/sq ft) and the estimated rental value (ERV) of the portfolio increased 4.4% during the quarter to £6.16/sq ft (previous quarter: £5.90/sq ft), reflecting the enhanced scope for uplifts in rent at lease expiry and renewal.

Occupancy across the MLI portfolio increased to 93.7% (31 December 2020: 93.1%, 30 June 2020: 92.0%, 31 March 2020: 91.0%).

Visitors to the group’s online lettings platform (industrials.co.uk) was up 35% in the quarter and up 75% year on year, while average weekly leasing enquiries were 56% higher year on year.

At quarter end there were 66 leasing transactions under offer on over 234,000 sq ft of space, of which 101,000 sq ft related to new lettings and 133,000 sq ft to existing customer renewals. A further six lease transactions had exchanged and were awaiting completion on a total of 24,000 sq ft. 

Rent collection

Stenprop’s rent collection statistics, as at close of business on 23 April 2021, are as follows:

MLI portfolio transition progress

The group acquired £26m of new MLI assets in the quarter and sold €64m of German retail. In total, Stenprop has completed 14 separate UK MLI acquisitions in the financial year to 31 March 2021, with an aggregate purchase price before costs of £91.5m vs an acquisition target of £90m.

As at 31 March 2021, MLI assets accounted for over 73% of Stenprop’s total portfolio based on September 2020 valuations. Following the completion of the sale of Hermann Quartier (exchange of contracts was announced on 29 December 2020), the percentage of UK MLI within the Company’s portfolio is expected to rise to over 75%.

As at 31 March 2021, Stenprop’s net loan-to-value ratio (LTV) was approximately 29% when allowing for unrestricted cash.

Stenprop will announce its full year results for the 12 months ending 31 March 2021 on 11 June 2021.  At this time, the company will also set-out the schedule for its planned move from the Specialist Funds Segment to the Premium Segment of the Main Market of the London Stock Exchange, and the corresponding proposed change from a Primary to a Secondary Listing on the Johannesburg Stock Exchange.

Paul Arenson, chief executive, said: “We have had another excellent quarter of leasing activity, during which we have captured strong rental uplifts averaging 20%. Demand for MLI space across the UK is as high as we’ve ever witnessed. Through our operating platform we are successfully capturing and converting this into new customers, which is reflected in the falling vacancy rate.

“The most recent lockdown has had an impact on rent collections, although the impact has not been as severe as we witnessed in early 2020. We remain optimistic that the majority of rents due during this latest lockdown period will ultimately be collected in line with historic rental collection trends seen since the start of the pandemic with amounts due now closing in on high 90% collection levels.”

STP : Stenprop makes letting progress