Acquisitions and Lettings Update
23 January 2023
Urban Logistics REIT plc
("Urban Logistics" or the "Company")
Acquisitions and Lettings Update
Urban Logistics (LON: SHED), the last mile logistics focused REIT, is pleased to announce five new acquisitions for a total consideration of £48 million at a net initial yield of 6.0%. In addition, the Company has completed two new lettings, generating additional rental income of £0.2 million, and two lease restructurings.
Urban Logistics has also reached practical completion on five units of its forward funded developments adding 239,235 sq ft to the portfolio. Three of the five units are under offer, one was pre-let and marketing is ongoing for the final unit.
For the quarter ended 31 December 2022, the Company collected 99% of its due and demanded rent.
Separately, the Company has also been reviewed by MSCI's ESG team, and has received a rating of 'A' (up from 'CCC'), a testament to the significant improvements made in ESG performance and reporting in the recent period.
Richard Moffitt, Chief Executive, commented:
"In the period since 30th September 2022, we have selectively deployed capital into assets which provide immediate income at a very attractive yield and provide the potential for value enhancing mid-term asset management opportunities. We have also been able to achieve significant rental uplifts on new lettings, demonstrating the quality of our existing portfolio and proving our asset management strategy. In addition, we have completed five developments in this period on time and on budget providing a very attractive yield on cost and demonstrating an additional route through which we can deliver returns for shareholders. We're also pleased to see MSCI recognise our commitment to ESG with a significant upgrade to our rating from CCC to A, which follows our recent upgrades from GRESB and EPRA's sBPR awards, and we look forward to building on this success."
Acquisitions:
Columbia Threadneedle Street Portfolio
The following assets were acquired as a collective portfolio for £39.5m at blended 6.10% NIY, all immediately income producing but all with short or medium term asset management opportunities combined with currently low rents:
· 95,352 sq ft unit in Redditch, Worcestershire, let to Carpet and Flooring (Trading) Limited, on a lease expiring in 2027;
· 112,586 sq ft unit in Droitwich, let to Amazon UK Services on a lease expiring in 2026;
· 113,071 sq ft unit in Southampton, let to Delamode Logistics Limited, on a lease expiring in 2024
· 81,699 sq ft unit in Rugby, let to the Volvo Group UK Ltd, on a lease expiring in 2026.
Aylesford Way, Thatcham
· 63,488 sq ft warehouse for £8.7m at a NIY of 5.8%, situated near junction 12 of the M4, let to Offsite Storage and Integrated Services Ltd, on a lease expiring in 2029.
Asset management activity
Despite the broader macro-economic backdrop, occupier demand for our assets remains strong. Asset management activity has continued in the period, with two new leases signed, two lease restructures, and one pre-let lease commencing.
New lettings
Two new lettings, representing a 9% increase on previous passing rent, generating a total of £562,874 in annual rental income:
· A new lease was entered into on a 21,875 sq ft unit in Sittingbourne, Kent, with Sign Trade Supplies Limited, for a term of 10 years at a rent of £207,874 per annum;
· A new lease was entered into on a 56,385 sq ft unit in Peterborough with 2Excel Limited, for a 15 year term at a rent of £355,000 per annum.
Lease restructures
Two leases restructured to remove breaks, moving WAULT to first break for these assets from 4.2 years to 9.2 years. The rent levels remain unchanged.
· A lease with Tuffnells Parcels Express Ltd for a 22,783 sq ft unit in Northampton has had a break in April 2027 removed, leaving the lease running until April 2032, with a rent review in 2027.
· A lease with Tuffnells Parcels Express Ltd for a 18,625 sq ft unit in Sheffield has had a break in December 2026 removed, leaving the lease running until December 2031, with a rent review in 2026.
Lease commencement
A pre-let lease on one of the Company's newly completed forward funded development assets commenced on a 120,815 sq ft unit in Golborne, Warrington, to Master Removers Ltd for a term of 15 years at a rent of £964,406 per annum.
Newly completed forward funded developments
In the period a further 239,355 sq ft of development assets have reached practical completion, comprising five logistics units, the construction of which was forward funded by the Company:
Kingsway Business Park, Rochdale
· Four mid box logistics units totalling 118,540 sq ft, located close to the M62 and 30 minutes from Manchester;
· Targeting a yield on cost of 8.0% when fully let;
· EPC of A for all units and BREEAM rating of Very Good;
· Three units already under offer, with marketing ongoing at the final unit.
Bridge Street, Golborne
· 120,815 sq ft logistics unit located on the North side of Warrington, near junction 23 of the M6;
· Achieving a yield on cost of 8.0% now fully let;
· EPC of A and BREEAM Very Good;
· The unit was pre-let during construction to Master Removers Ltd as detailed above.
- Ends -
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Urban Logistics REIT plc Richard Moffitt
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+44 (0)20 7591 1600 |
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Buchanan Helen Tarbet Simon Compton George Beale
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+44 (0)20 7466 5000 +44 (0) 7872 604453 +44 (0) 7979 497324 +44 (0) 7450 295099 |
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Singer Capital Markets - Joint Broker James Maxwell / Alaina Wong / Oliver Platts (Banking) Alan Geeves / James Waterlow / Sam Greatrex (Markets)
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+44 (0)20 7496 3000 |
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Panmure Gordon (UK) Limited - Joint Broker Chloe Ponsonby /Emma Earl (Investment Banking) |
+44 (0)20 7886 2500 |
About Urban Logistics REIT
Urban Logistics REIT plc (LON: SHED) is a FTSE 250 property investment company. The Company is the only London-listed REIT to focus on specialist last mile / last touch logistics assets, with a tenant base which delivers essential goods within the UK. The Company's strategy is to invest in mid-sized logistics properties with the objective of generating attractive dividends and capital returns through active asset management.
Urban Logistics' investment management team, led by Richard Moffitt and Christopher Turner, has over 50 years' experience in investing in the logistics market within the broader real estate market. The team's ability to source vital and strategically located mid-sized single let properties, with high-quality tenants, off-market at favourable terms, creates considerable value for shareholders. Tenants include Amazon, XPO, DHL, Hermes, DPD, Boots, Unipart (for NHS), Royal Mail and J Sainsbury Plc.
Buying well and pursuing additional value enhancing asset management initiatives has driven the Company's growth, enabling Urban Logistics to grow from a £10m market cap company at IPO on the AIM in April 2016 to a FTSE 250 constituent.
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