Urban Logistics REIT has deployed £88m of the £109m it raised in July in six off-market transactions.
The blended net initial yield (NIY) was 5.4% and is made up of a combination of income producing assets and forward funding commitments. Separately a further £15m was deployed before this equity raise, in three transactions.
The manager said that it expects to deploy the remaining proceeds of the equity raise as well as draw down on available debt facilities as planned in short order.
Acquisitions
The acquisitions are principally focused on the Midlands and South East, but also include an asset just off the M62 between Manchester and Leeds, as well as in the South West in Exeter, and bring the total portfolio to 6m sq ft.
The income producing assets financed through equity raised in July comprise:
- Three units in Farnham, totalling 43,958 sq ft for £8.5m, a NIY of 4.5%;
- A 25,990 sq ft unit near Ipswich for £2.7m at a NIY of 5.5%;
- A 50,672 sq ft unit at Wellingborough for £3.6m at a NIY of 5.2%; and
- Two units in one transaction: a 128,460 sq ft property in Rugby and a 124,134 sq ft property in Huntingdon for a combined purchase price of £27.6m, and a NIY of 4.5%.
The forward funding commitments financed through equity raised in July comprise:
- In one transaction, forward funding of four units totalling 118,540 sq ft on a business park near Rochdale, as well as a single unit of 44,608 sq ft in Castle Donnington, just off the M1 south of Nottingham. The combined price was £17.4m at a NIY of 6.2%. This is in addition to the earlier phase of this project (already announced but financed through this equity raise) of £23m of forward funding commitments at a 6.2% yield;
- Forward funding a new building of 26,964 sq ft for £4.8m at Exeter Gateway logistics park. The project benefits from guaranteed rent at a NIY of 5.3%. The company already has a number of units at Exeter Gateway.
Assets acquired prior to the July equity fundraise comprise:
- A site in Nottingham containing four units totalling 119,522 sq ft, for £11.3m, representing a NIY of 6.4%;
- A 14,510 sq ft unit in Theale for £3.3m, with an NIY of 5.3%; and
- An 11,906 sq ft unit at Brierley Hill, to the west of Birmingham for £1.1m, at a NIY of 5.0%.
Richard Moffitt, Chief Executive, said: “We are delighted to have acquired these high-quality assets off market with attractive yields and value enhancement potential, in line with our investment strategy. These properties are strategically positioned in areas with excellent transport links, strong demand for stock and limited supply.
“The value created by our strategy is, we believe, demonstrated not only by the quality of these acquisitions but also the 11 lettings and lease events signed in the period, covering 702,206 sq ft of space. With the UK’s fundamental mismatch between the demand for last-mile logistics assets and their availability, the company, with its unparalleled network and sector knowledge, is uniquely placed to drive significant rental and capital value growth for shareholders.”
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