Warehouse REIT completes 10-year renewal in Warrington

Specialist warehouse investor Warehouse REIT has completed a 10-year lease renewal with storage and information management company Iron Mountain at Stretton Green Distribution Park in Warrington, it announced on Friday.

The AIM-traded firm said Iron Mountain has occupied the 106,000 square foot single-let purpose-built high bay warehouse since 2005.

It said the 10-year lease renewal, with no breaks, was agreed at a 26% uplift to the previous rent paid, with a headline rent of £0.62m per annum, or £5.80 per square foot.

The agreement reflected the “strong demand” for high quality warehouse facilities in the north west, the board said, as well as the strategic importance of the unit to the tenant's UK client base.

Stretton Green Business Park is two miles from junction 20 of the M6 and M56 interchange, close to Manchester, Liverpool and Warrington.

The warehouse was one of seven properties in a 995,100 square foot portfolio acquired by Warehouse REIT in September for an initial consideration of £70m - the value of which increased by 7.4% in the subsequent six months.

The letting would further enhance income and value, increasing the weighted average unexpired lease term for the entire Warehouse REIT portfolio from 5.2 years to 5.4 years, the board said.

“This major lease renewal with an extremely strong covenant is the latest illustration of our ability to significantly improve the rental tone across Warehouse REIT's portfolio, actively working with our tenant partners to reach a solution that benefits both owner and occupier,” said Paul Makin, investment director of Warehouse REIT’s adviser, Tilstone Investment Partners.

“Whilst we continue to be rigorously focused on cash collection in order to mitigate the near term economic challenges posed by Covid-19, we are alive to all opportunities resulting from the consequential acceleration of favourable structural trends which are underpinning occupier demand for space across the portfolio.”

At 1233 BST, shares in Warehouse REIT were flat at 110p.