Urban Logistics, the last mile logistics focused REIT, has bought five assets for a total consideration of £48 million at a net initial yield of 6.0%.
The REIT acquired Columbia Threadneedle’s street portfolio for £39.5m at blended 6.10% NIY. The portfolio comprises;
· 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.
The company also purchased a 63,488 sq ft warehouse Aylesford Way, Thatcham 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.
In addition, the company has completed two new lettings, generating additional rental income of £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.”