UK-based industrial and logistics REIT Urban Logistics (AIM: SHED) has acquired nine logistics properties and development site for £56.1 million, following its £136.1 million equity capital raise which completed in March.
The acquisitions at an average net initial yield (NIY) of 6.3% comrising:
- a portfolio of seven single-let regional distribution warehouses for £31.9 million at 6.8% NIY
- an NHS distribution centre in Normanton for £13.0 million at 5.2% NIY
- a regional distribution centre in Rubery for £5.5 million at 6.0% NIY
- conditional agreement for the forward funding of a high-quality logistics property on a 3-acre site in Peterborough
Richard Moffitt, Chief Executive, commented:
“Covid-19 has posed challenges for business and society as governments seek to manage the contagion and its long-term impact. Throughout this crisis our priority has been ensuring that the Company operates safely and in line with the government’s evolving guidance.
“The crisis has highlighted the importance of warehousing and distribution real estate, especially scarce regional and last mile properties focused on essential goods and consumer staples.
“Having raised £136 million from new and existing shareholders in March, we are delighted to have deployed £56 million into these regional logistics properties close to established urban locations. The properties are well located and provide a good balance of asset management opportunities and income.
“Our strong balance sheet, conservative debt and robust rent roll performance enables the business to manage the impact of Covid-19. We will continue to proceed cautiously and review further acquisition opportunities and report on these when appropriate.”
The company also said 93% of rents for the quarter to June 2020 collected as at the date of this statement compared to 91% at the same time last year.
”Of the 38 properties in the Company’s portfolio, only four are not fully operational as a result of Covid-19 and the Manager is currently discussing a revised payment plan with one of these tenants,” stated in the statement. ”As at today’s date, after taking the acquisitions into account, the Company is in a strong net cash position with available resources of £94 million.”