Urban Logistics REIT has announced the acquisition of two logistics assets for £21.1m, as it looks to demonstrate the strengths of its strategy amid an activist shareholder revolt.
The assets in Liverpool and Leeds were bought at a blended net initial yield (NIY) of 7.34% and a blended reversionary yield of 7.64%. These were funded from capital it received from recent disposals (for £26.3m at a blended NIY of 4.93%) at a significant yield margin of 2.41 percentage points.
The company said that the assets have asset management potential in the near term to grow rental income.
The portfolio recycling illustrates the company’s strategy of growing income and rebalancing the portfolio towards asset management opportunities.
The assets
- 101,260 sq ft unit in Leeds, acquired for £10.1m at an NIY of 7.46%, with a rent guarantee lasting 1.4 years. The unit is well located on the edge of Leeds. The property is being refurbished to improve ESG and future letability, and to provide the opportunity to capture reversionary yield of 7.58%. All capex associated with the refurb has been accounted for in the £10.1m acquisition cost;
- 120,190 sq ft unit in Liverpool, acquired for £11.0m at an NIY of 7.23% and with a reversionary yield of 7.70%. The lease runs to 2032, with a rent review in 2027. The unit is located at a key connectivity point between Manchester and Liverpool, providing access to the wider motorway network.
Nigel Rich, chairman of Urban Logistics, said:
“These acquisitions further demonstrate the efficacy of our proactive income and capital growth strategy. We continue to be encouraged by our strong pipeline of asset management opportunities and are confident that the team’s expertise in this highly specialised real estate sub-sector will increase earnings and asset value to deliver attractive shareholder returns.”
