In a lettings update, Urban Logistics REIT has announced that it completed new lettings on five units, totalling 301,000 sq ft of space and £3.0m of annual rent, since 30 September 2024.
Two of the lettings were on assets acquired in September 2024 for a total new headline rent of £1.3m per annum and a WAULT of 11 years. These leases generated a 7% uplift on target rental levels on acquisition.
The other three lettings were on previously tenanted assets, and totalled a headline rental income of £1.7m per annum and a WAULT of 18 years. This asset management resulted in a like-for-like rental uplift of 46%, and ahead of external valuer’s ERV.
This letting activity reduces portfolio vacancy from 8.1% as at 30 September 2024 to 6.2%, on a proforma basis, with continued activity on further leasing ongoing.
Richard Moffitt, investment adviser CEO, commented: “Underlying demand for the company’s last touch logistics assets remains strong, as evidenced by the very positive like-for-like growth figures seen in this leasing activity, as well as the premium to ERV that these properties are commanding.
“These transactions also evidence the high quality of the assets acquired at the end of 2024, and our ability to add value to them. Rapidly securing new tenants and adding significantly to annual rental income will drive immediate capital growth.”
Leasing details
- Trax Park, Doncaster:
A 130,677 sq ft unit in Doncaster was let to Unipart Rail Ltd (a 5A2 covenant), at an annual rent of £1.0m and a term of 10 years. The asset was acquired in September 2024, and subject to a rent guarantee, and this letting reflects rental level 10% above the rent guarantee level.
The asset was refurbished, including ESG improvements and the installation of significant solar generation capacity. An improvement in EPC is anticipated at the next rating event.
- Hedge End, Southampton:
A 113,071 sq ft unit in Southampton was let to A.G. Parfett & Sons Limited (a 5A2 covenant), at an annual rent of £1.3m and a term of 20 years. The asset was vacated by the previous tenant and relet within the same financial year at a rent ahead of both previous passing rent and external valuer’s ERV.
The asset was refurbished including significant ESG improvements. The EPC has been improved in this process from a C to a B.
