TIDMWHR
RNS Number : 2997J
Warehouse REIT PLC
09 April 2020
9 April 2020
Warehouse REIT plc
(the 'Company' or 'Warehouse REIT')
Business & COVID-19 Update
Warehouse REIT, the AIM-listed company that invests in and
manages urban and 'last-mile' industrial warehouse assets in
strategic locations in the UK, today provides a business update in
light of the COVID-19 pandemic, ahead of its results for the year
ended 31 March 2020, which are expected to be announced in late
May.
Introduction
During these difficult times caused by the COVID-19 pandemic,
our priority is the safety and wellbeing of all our stakeholders,
especially our colleagues and occupiers. At the same time, our
focus is on ensuring that the Company is well positioned to
navigate any short-term market disruption in order to protect
long-term shareholder value.
Rent collection
As at 7 April 2020, 74% of contracted rent due for the quarter
to 24 June 2020 had been collected and this number increases to 82%
where tenants we have agreed will pay monthly rather than quarterly
are included. The Company has received a small number of support
requests from tenants facing financial hardship and, reflecting the
importance it places on its occupier relationships and the
understandable impact that COVID-19 has had on the cashflow of
small businesses, it has negotiated alternative payment
arrangements where necessary.
Financial position
The Company has continued to exercise financial discipline in
order to ensure that it is well capitalised and has balance sheet
resilience. As at 31 March 2020, the Company has approximately
GBP5.5 million of cash and GBP33.5 million of headroom on its
undrawn facilities, providing it with substantial operational
flexibility.
As part of its commitment to strengthening its balance sheet,
since September 2019 the Company has undertaken a disposal
programme of its non-core assets, raising a combined consideration
of GBP17.6 million, (7.6% ahead of the 30 September 2019
valuation). Based on net debt of GBP181 million as at 31 March 2020
and the latest portfolio valuation as at 31 January 2020, the
Company's loan-to-value is 39.9%.
The Company further strengthened its balance sheet in January
2020, entering into a new five-year (plus one, plus one) GBP220
million debt facility with a club of four banks, replacing an
existing HSBC facility totalling GBP210 million. The refinancing
comprised a GBP157 million term loan and a GBP63 million Revolving
Credit Facility. Based on the current drawn Company net debt,
Warehouse REIT's pro forma margin has reduced from a blended 2.14%
to 2.00% plus LIBOR on all of its bank debt. There are no debt
maturity dates prior to January 2025.
The facilities have significant headroom on both a loan-to-value
and interest coverage ratio basis: valuations would need to fall
c.25% or rent would need to fall c.45% when compared to 30
September 2019 before these covenants are breached.
Portfolio & Lettings
Warehouse REIT has a highly diversified UK portfolio of 95
assets totalling 6.15m sq ft, with 560 tenants operating across a
wide range of sectors including e-commerce, 3PL, manufacturing and
automotive. Over the past 12 months, the Group has focused on
improving the quality of its income, with established businesses
including Amazon, John Lewis and Direct Wines becoming tenants.
To date, the UK occupational market has remained strong, as a
result of the structural trends that have underpinned the rise in
internet shopping and investment by retailers in the 'last mile'
delivery sector, which may even accelerate as a result of the
current crisis. Since 21 January 2020 the Company has completed 24
new lettings and lease renewals across 129,000 sq ft of space,
achieved at 3.7% ahead of 30 September 2019 ERVs, generating
GBP803,400 per annum of contracted rent. Highlights include an
11-year lease extension for 42,000 sq ft agreed with Tristel PLC, a
manufacturer of infection prevention, contamination control and
hygiene products, at Lynx Business Park, Newmarket,
Cambridgeshire.
The COVID-19 pandemic has led to significant pressure being
placed on the UK's logistics and distribution capabilities, and a
number of the Company's tenants are currently experiencing
significantly increased trading volumes due to their involvement in
the supply of critical goods and services to businesses and
consumers. As a result, the Company is seeing ongoing demand for
its warehouse space; since the government-imposed lockdown
commenced on 23 March 2020, it has secured new lettings which are
expected to generate a further GBP183,000 of annual rent.
Furthermore, it is currently in active discussions with both
existing and potential occupiers for additional space across the
current portfolio.
Dividend
The Company is continuing to closely monitor the evolving
COVID-19 situation and will keep shareholders and wider
stakeholders updated as required. Operational and financial
performance to date has been robust and the third quarter dividend
of 1.6 pence per share was paid as planned on 31 March 2020. At
this stage, the Company remains committed to meeting its dividend
target for the financial year to 31 March 2020 of 6.2 pence per
share.
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 is an AIM listed UK Real Estate Investment Trust
that invests in and manages urban and 'last-mile' industrial
warehouse assets in strategic locations in the UK.
Occupier demand for urban warehouse space is increasing as the
structural growth in e-commerce has driven the rise in internet
shopping and investment by retailers in the "last mile" delivery
sector, yet supply remains constrained giving rise to rental
growth.
The Company is an alternative investment fund ("AIF") for the
purposes of the AIFM Directive and as such is required to have an
investment manager who is duly authorised to undertake the role of
an alternative investment fund manager. The Investment Manager is
currently G10 Capital Limited.
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END
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