TIDMWHR
RNS Number : 2400A
Warehouse REIT PLC
20 January 2020
20 January 2020
Warehouse REIT plc
(the 'Company' or 'Warehouse REIT')
Trading Update and Increased Dividend
Warehouse REIT, (the "Company"), the AIM-listed specialist
warehouse investor, announces a trading update covering the period
since 1 October 2019.
During the period the Company completed 24 new lettings and 20
lease renewals across 189,000 sq ft of space, achieved at 6.4%
ahead of 30 September 2019 ERVs, generating GBP1.1 million per
annum of contracted rent. The portfolio's total occupancy increased
to 92.6% from 91.5% (30 September 2019) with effective vacancy only
3.1% excluding units under refurbishment or under offer to let. The
Company also completed the disposal of five smaller non-core assets
for a combined price of GBP4.4 million, at an average of 5.6% ahead
of 30 September 2019 book values and 12.4% ahead of cost.
Andrew Bird, Managing Director of Tilstone Partners Ltd, the
investment advisor of Warehouse REIT, commented:
"Alongside Warehouse REIT's disciplined deployment of
shareholders' funds from our most recent fundraise, we continue to
extract strong operational performance from the Company's
diversified portfolio of UK warehouse assets. The Company has
achieved both rents and strategic disposals in excess of
valuations, while competition for space from an ongoing broad range
of tenants has translated into increased occupancy levels.
Furthermore, the current rent roll does not reflect a number of
income and value enhancing projects which we are confident will be
delivered in the near term.
"We continue to see attractive acquisition opportunities that
meet Warehouse REIT's investment criteria, at both an individual
asset and portfolio level, underpinned by solid occupational
demand. We are confident that our conviction call on the
well-located multi-let urban warehouse space - where rents are
forecast to outperform - will allow the Company to deliver its
shareholders with an attractive, progressive and well covered
dividend.
"Underpinned by our confidence in the ongoing asset management
and with the benefit of the recent deployment of capital ahead of
target, the Company is today pleased to declare a quarterly
dividend of 1.6p per share, reflecting a 6.7% increase on the
previous quarterly dividend."
Asset management
The 24 new lettings represent 143,000 sq ft of floor space,
generating rental income in excess of GBP811,000 per annum, 7.5%
ahead of the 30 September 2019 ERV. The Company has continued to
capture reversionary potential from the portfolio, with 20 lease
renewals generating a combined annual rent of GBP300,000, an uplift
of 9.2% as compared to the previous rent.
Highlights during the period include:
-- A new 10-year lease with no break, to a building materials
manufacturer and distributor, on a 20,000 sq ft unit at Gawsworth
Court, Warrington. The rent of GBP137,000 per annum represents an
11.8% premium to the 30 September 2019 ERV.
-- A 5,600 sq ft letting to a sports charity, at Yale Business
Park, Ipswich, on a ten-year lease with a break at year six, at
GBP43,000 per annum, 18.5% ahead of the 30 September 2019 ERV.
-- The renewal of a 2,500 sq ft unit at Smeed Dean Centre,
Sittingbourne on a new seven-year lease. The average rent over the
lease term represents a 63.6% premium to the previous rent.
-- An 11,400 sq ft unit at Goodridge Business Park, Gloucester
has been re-let on a four-year term, to a fluid technology company,
at 18.9% ahead of the previous rent.
In the period since 30 September 2019, the total portfolio
occupancy has increased from 91.5% to 92.6%, with the effective
vacancy only 3.1% as 3.0% of the portfolio ERV is under
refurbishment and a further 1.3% is under offer to let. The space
under offer will deliver approximately GBP389,000 per annum of
rent, with lettings 5.3% ahead of 30 September ERVs. Occupancy
excluding units under offer and units undergoing refurbishment
stands at 96.9%.
Contracted rent for properties owned throughout the period since
30 September 2019 has increased by 1.0%, reflecting the positive
impact of new lettings as well as rent reviews and renewals which
more than offset space returned. Total contracted rent is now
GBP31.5 million.
Alongside ongoing asset management activity, in October 2019
planning permission was secured on 4.2 acres of surplus land at
Warehouse REIT's existing Nexus estate in Knowsley for 35,000 sq ft
of warehouse space, a petrol filling station with associated
ancillary uses of 5,000 sq ft and a 2,200 sq ft drive-through. The
existing estate comprises 12 units totalling 184,800 sq ft and has
strong transport links being situated on Junction 4 of the M57,
approximately seven miles from Liverpool city centre. Discussions
with potential occupiers are progressing well. Progress is also
being made working up value-accretive proposals on other schemes
within the portfolio. For example, the Company's most recent
purchase prior to this quarter (being the Echelon Portfolio
acquired at an attractive 7% NIY on 27(th) September 2019) has
already yielded meaningful lease renewal negotiations and a
planning application has been submitted for a 27,000 sq ft
warehouse extension.
Acquisitions and disposals
In October the Company completed the acquisition of the 29-acre
Midpoint Estate in Middlewich, Cheshire. The 182,500 sq ft
multi-let estate comprises 20 high quality warehouse units in a
strategic location within two miles of Junction 18 of the M6
motorway and approximately twenty-six miles south of Manchester.
The purchase price of GBP15.5 million represented a net initial
yield of 6.6%. Since the acquisition the Company has already
increased overall passing rents by 3.7% increasing the running
yield to 6.8% and also extended the WAULT to expiry by 1.2 years to
6.5 years.
The disposals of five smaller assets totalling 82,517 sq ft were
completed during the period for a combined price of GBP4.4 million,
an average of 5.6% above 30 September 2019 book values, reflecting
a blended 4.2% net initial yield. The sales are part of the ongoing
strategy to dispose of non-core assets; Bangor has a retail tenant,
Redditch and Swindon are offices, Wardley was vacant and like
Blackburn, was sold to an owner occupier.
Dividend
The Company has today declared its third quarterly interim
dividend for the financial year ending 31 March 2020 of 1.6 pence
per ordinary share payable on 31 March 2019 to shareholders on the
register on 28 February 2020. This represents an increase of 6.7%
on the two interim dividends paid to date of 1.5 pence per ordinary
share totalling 3.0 pence per ordinary share.
The increase reflects the Company successfully deploying the
proceeds of the capital raise (April 2019), ahead of programme, by
30 September 2019 and the positive outlook for earnings. The
dividend target for the year has been increased to 6.2 pence per
share from the previous target to pay dividends totalling at least
6.0 pence per share. Thereafter, the Company will adopt a
progressive dividend policy, in line with anticipated growth in
earnings.
The ex-dividend date will be 27 February 2020. The dividend of
1.6 pence per ordinary share will be paid in full as a Property
Income Distribution.
Enquiries
Warehouse REIT plc via FTI Consulting
Tilstone Partners Limited +44 (0) 1244 470
Andrew Bird 090
G10 Capital Limited (part of the Lawson
Conner Group), AIFM +44 (0) 20 3696
Maria Glew, Gerhard Grueter 1302
Peel Hunt (Financial Adviser, Nominated
Adviser and Broker) +44 (0) 20 7418
Capel Irwin, Harry Nicholas, Carl Gough 8900
FTI Consulting (Financial PR & IR Adviser
to the Company)
Dido Laurimore, Ellie Sweeney, Richard +44 (0) 20 3727
Gotla 1000
Further information on Warehouse REIT is available on its
website:
http://www.warehousereitplc.co.uk
Notes
Warehouse REIT plc owns and manages a diversified portfolio of
warehouse real estate assets in UK urban areas.
This is a compelling market. The structural rise in e-commerce
and investment in 'last-mile' delivery contribute to high tenant
demand, while limited vacant space and our active asset management
lead to growing rents. Capturing this income allows us to offer our
shareholders an attractive dividend and the prospect of capital and
further dividend growth.
Our portfolio of well-located assets is let to occupiers ranging
from pure e-commerce to traditional light industrial. As we expand,
our vision is for Warehouse REIT to become the warehouse provider
of choice across the UK.
The Company's shares were admitted to trading on AIM in
September 2017.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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