Urban Logistics REIT has announced plans to move to the premium segment of the main market of the London Stock Exchange.
The directors said they believed that the market capitalisation of the company (£550m) now justifies the move and that it would provide the most appropriate market listing for the continuing growth of the company.
The announcement was made with a trading update in which the company said that 99.4% of the space in its portfolio of 91 logistics properties was occupied and that it had collected 99% of rent in the six month period to the end of September.
Having raised £108.3m in July, the group has deployed £103m in eight transactions at a weighted net initial yield (NIY) of 5.5%. It has around £50m of further investments in advanced stages of contractual progress, which it expects to be completed in the near term at a weighted average 6.2% NIY.
The group has a new pipeline worth over £400m of logistics properties identified.
In the six months to the end of September, the company completed 15 new lease events across the portfolio, totalling 813,939 sq ft generating an uplift of £1.6m in contracted rent. These comprised 11 new lettings, three regears and an open market rent review. Notable asset management events include:
- The Unipart Group (part of a logistics contractor for the NHS) extended its existing lease for the 136,383 sq ft property it occupies in Alfreton, north of Nottingham, for an additional 10 year period. The rent rose 18.0%, from £593,250 to £700,000 (£5.12/sq ft);
- An open market rent review was completed with Meritor Aftermarket UK Ltd, for the 26,179 sq ft property it occupies in Redditch, just south of Birmingham. The rental rate increased from £117,806 (£4.50/sq ft) to £138,749 (£5.30/sq ft), an increase of 17.8%;
- Anglian Water Ltd signed a new 15 year lease for £340,011 (£7.39/sq ft) on a property that Urban Logistics REIT acquired through a forward funding agreement. The property, near Peterborough, comprises a 46,000 sq ft unit with 60 bay car park. The work was completed on time and ahead of budget;
- Wincanton Ltd signed a new 15 year lease for a 132,487 sq ft unit in Paisley, near Glasgow. The building was purchased a year ago and the lease in place at the time was extended on a short term basis before the unit was substantially refurbished. The agreed rent was £828,044 (£6.25/sq ft), up 13.7% from the previous recognised rent of £727,986 (£5.28/sq ft).
Richard Moffitt, chief executive, said: “The logistics real estate sector continues to enjoy very positive market conditions in recent months with an ongoing supply and demand imbalance for suitable properties. We remain highly focused on our last mile, or last touch, strategy, where we have built a market leading position. Last mile logistics assets play a crucial role in the supply chains of our tenants demonstrated by our occupancy figures of 99.4%. Our activity in this sector is underpinned by a focus on acquiring high quality, well located assets let to robust counterparties as demonstrated by our recent rent collection figures, in excess of 99% for the past half year.
“Going forward, we will continue to focus on active asset management to drive capital value creation in the existing portfolio, while our reputation as a reliable and well known counterparty continues to create opportunities in accessing attractive off market deals at compelling valuations.
“Following the successful deployment of the considerable capital raised to date as an AIM company, we have created a major portfolio of 91 last mile assets, secured at an attractive blended NIY entry valuation. After continued dialogue with shareholders, the board believes that a Main Market listing is the most effective platform to further grow and diversify the shareholder register and the asset base. We look forward to further updating shareholders on our plans shortly.”
SHED : Urban Logistics REIT plans main market move