Warehouse REIT turns in strong first-half performance

Specialist commercial property investor Warehouse REIT reported continued strong rent collection performance in its half-year results on Tuesday, with 92.1% of rent due collected as at 4 November.

The AIM-traded real estate investment trust said its total portfolio was valued at £907.1m at period end on 30 September, up from £792.8m at the end of March, with a like-for-like uplift of 9.4% at the end of the first half.

Its portfolio value consisted of £857.7m in relation to the investment portfolio of completed assets, and £49.4m of development property and land, compared to £751.9m and £40.9m on 31 March, respectively.

EPRA net tangible assets per share came in at 152.4p, rising from 135.1p, with the 12.8% growth said to have been primarily driven by a revaluation increase of 17.3p per share.

Warehouse REIT reported a total accounting return for the period of 15.1%, up from 9.5% for the same period a year ago.

Bank debt totalled £263m at period end, with cash balances of £25m resulting in a loan-to-value ratio of 26.2%, compared to 24.6% on 31 March/

The board put the increase there down to asset acquisitions in the period, net of revaluation uplifts.

Looking at the income sheet, Warehouse REIT recorded revenue of £23.4m for the six months ended 30 September, up from £15.7m in the same portion of the prior year, while its operating profit before investment property gains grew to £16.7m from £10.8m.

Earnings per share were 20.4p on an IFRS basis and 3.1% on an EPRA basis, up from 13.2p and 2.6p, respectively.

Dividends totalling 3.1p per share had been paid or declared by the board for the period, which the directors said was in line with their full-year target of at least 6.2p distributed per share.

Warehouse REIT said its move to London’s Main Market remained a strategic near-term priority.

“We have maintained our rigorous focus on further improving the quality and security of income from the portfolio, as well as acquiring high-quality, well-located assets at valuations that are accretive to shareholders,” said chairman Neil Kirton.

“Importantly, we also made good progress with embedding sustainability considerations in every aspect of our operations.

“As the industrial asset class continues to rerate, we look forward to delivering further strong performance for shareholders.”

Andrew Bird, managing director of the company’s investment advisor Tilstone Partners, added that conditions in the occupational market remained “highly attractive” for asset owners, with “significant” demand and a limited supply of warehouse space driving rental growth.

“We have seen that the conditions are also attracting growing investment interest which is compressing yields, but we continue to source new assets off-market at appropriate prices, focusing on properties adjoining the group's existing estates,” Bird said.

“Along with our strategic development initiatives, we believe that will help the company to continue to deliver strong returns.”

At 1022 GMT, shares in Warehouse REIT were up 3.16% at 163p.