Urban Logistics REIT doubles size of portfolio in “transformational year” and reports a 23.9% uplift in NAV.
The group, which raised £358m of equity, moved to the main market and was included in the FTSE 250 index in the 12 months to 31 March 2022, said its portfolio of mid-box urban warehouses was now valued at £1,015m (up 99.9%) – thanks to acquisitions and a 25.4% like-for-like portfolio valuation uplift.
This helped the company to post a 23.9% uplift in EPRA NAV to 188.8p per share.
Net rental income was £36.5m (up a massive 59.8% on 2021) largely due to new acquisitions, while adjusted earnings was 6.71p per share (impacted by the capital raises).
Total dividends for the year was 7.6p (the same as the previous year). With dividends, the NAV total return was 29% and since its inception it has produced annual total returns of 16.4%.
The group has a very low loan-to-value (LTV) of 11.3% (2021: 27.9%) due to the growth in its portfolio. It has debt of £239m, with a weighted average cost of debt of 2.55%.
Significant capital deployment in the year included:
- Acquisitions worth £282m at a weighted average net initial yield of 5.3%
- Nine forward funding developments agreed with £52.9m deployed, and a current yield on cost of 6.7%
- Total portfolio now totals 113 mid-box urban logistics assets covering 8.3 million sq ft with a valuation £1,015m (up 99.9%)
- EPRA vacancy was maintained at 6.9%
- WAULT of 7.7 years (2021: 7.4 years)
- 25 new lease events completed during the year, with 16.4% like-for-like rental increases.
The company said it was “well capitalised and on track to be fully deployed following the £250m December fundraise in the first half of the financial year, at a blended net initial yield in excess of 5%”.
It added that its portfolio was positioned for future growth in rents and values through asset management initiatives.
It will look to increase debt from available facilities to grow the portfolio further and is targeting an LTV at the lower end of its 30%-40% target range. The company said that it anticipates a year of modest improvement in earnings, with the dividend expected to be at least maintained.
It said the urban logistics sector continues to have a strong supply/demand dynamic favoured to landlords, which it said could provide inflation beating upward momentum on rents.
Richard Moffitt, chief executive, said: “Our strategy of focusing on mid box, last mile, single let logistics assets has continued to deliver with the company having produced a total accounting return of 29% in the year and 16.4% averaged over the years since IPO. This strategy has been executed by buying well; our acquisitions in the year have an average net initial yield of 5.3% and have provided the opportunity for us to enhance income and value through our asset management initiatives.”
Nigel Rich, chairman, added: “The business is well capitalised and continues to benefit from the structural tailwinds in our sector. With further acquisitions in progress and significant opportunities for asset management within the existing portfolio, the business is well placed in the current inflationary environment and we are confident in its continued long term growth prospects.”
SHED : Urban Logistics REIT doubles in size in transformational year