Urban Logistics REIT PLC Portfolio and asset acquisitions (1980N)
September 23 2019 - 1:00AM
UK Regulatory
TIDMSHED
RNS Number : 1980N
Urban Logistics REIT PLC
23 September 2019
Urban Logistics REIT plc
("Urban Logistics" or the "Company")
Portfolio and asset acquisitions
Urban Logistics, (AIM: SHED) the specialist UK industrial and
logistics REIT, announces that on 20 September 2019 it exchanged
contracts to acquire a portfolio of six parcel distribution depots
from Connect Group plc, for a total consideration of GBP9.9 million
(before purchaser costs) at a 7.04% net initial yield, (the
"Connect Portfolio").
The Company also announces the purchase of two logistics
properties in Sittingbourne and Thatcham for GBP5.3 million at a
5.9% blended net initial yield, extending the portfolio's weighting
across south east England. The warehouses are 21,875 sq ft and
26,478 sq ft respectively and let to DHL Parcel UK.
These acquisitions are being funded from cash and existing bank
facilities.
The Connect Portfolio
The portfolio comprises 84,872 sq ft of warehousing with a low
average site cover of approximately 18%. A mix of freehold and long
leasehold properties, the depots are located in Coventry, Newport,
Plymouth, Leighton Buzzard, Andover and Perth.
Completion is expected on or around 27 September 2019 for the
freehold properties and by early November for the leasehold
properties.
The depots will be leased back to a subsidiary of Connect Group
plc, Tuffnells Parcels Express Limited ("Tuffnells"), for 20 years
on a fixed rental uplift (minimum of 1.0% to a maximum of 4.0% per
annum, cap and collar, linked to RPI). Connect Group plc will act
as guarantor. Tuffnells is a business-to-business distributor
specialising in irregular dimensions and weights, serving small and
medium sized companies across the UK. Post-acquisition, Tuffnells
will represent approximately 6.0% of the Company's rent roll.
The Company continues to evaluate acquisition opportunities
across three investment strands: business-to-business parcel
depots, last mile warehouses and the forward funding of new
logistics properties, (with any forward funding provided being less
than 10% of gross asset value). This will diversify and modernise
the portfolio, in a sustainable manner, and ensure it is well
placed to capture rental growth.
Richard Moffitt, Chief Executive, commented:
"We continue to focus on creating value across the portfolio and
securing attractive acquisitions. We're delighted to have further
diversified our portfolio, through the leasing agreement with
Tuffnells.
"Urban Logistics remains real estate's top performing
sub-sector. Despite the perceived uncertainties created by the
political backdrop, we remain focused on growing our portfolio and
undertaking asset management initiatives.
"Looking ahead, we have a high-quality acquisition pipeline and
continue to assess the potential for additional financing to grow
the business. We remain confident in our ability to continue
sourcing opportunities which can perform consistently well in the
longer term."
- Ends -
For further information contact:
Urban Logistics REIT plc
Richard Moffitt +44 (0)20 7591 1600
Montfort - Financial PR and IR adviser
Olly Scott +44 (0)78 1234 5205
N+1 Singer - Nominated Adviser and Broker
James Maxwell / James Moat (Corporate
Finance)
Alan Geeves / James Waterlow / Sam Greatrex
(Sales) +44 (0)20 7496 3000
Panmure Gordon (UK) Limited - Joint Broker
Chloe Ponsonby (Corporate Broking)
Emma Earl (Corporate Finance) +44 (0)20 7886 2500
Radnor Capital Partners
Joshua Cryer
Iain Daly +44 (0)20 3897 1830
About Urban Logistics REIT
Urban Logistics REIT plc is a property investment company,
quoted on the AIM market of the London Stock Exchange, (AIM:
SHED).
The Company has been established to invest in UK-based
industrial and logistics properties with the objective of
generating attractive dividends and capital returns for its
shareholders. Its investment strategy focuses on strategically
located smaller single let industrial and logistics properties
servicing high-quality tenants. Investment returns will be
generated by an experienced management team focusing on quality
stock selection and active asset management.
A number of structural and commercial factors currently support
the attractive opportunity in the last mile/regional industrial and
logistics real estate sub-sectors targeted by the Company,
including: strong occupier demand, (driven by the growth of
e-commerce and investment by retailers in their associated supply
chain) and a decline in the supply of smaller sized lettable space
in industrial and logistics real estate across the UK.
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END
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