Warehouse REIT reports good momentum since October

The AIM-traded, warehouse-focussed real estate investment trust said the transactions were completed 10.5% ahead of 31 March estimated rental values, generating £0.9m per annum of contracted rent.

It said total occupancy had decreased 1.1% from 30 September to 93.5% as at 31 December across its portfolio, however, the board said its effective vacancy was just 1.6% excluding units under refurbishment or under offer to let, down from 2.5% on 30 September.

The space currently under offer should deliver about £1.1m per annum of rent, the company said.

Further progress was reported at the company's Radway Green site in Cheshire, with the completed acquisition of an adjoining owner's 16 acre site for £7.5m before costs.

The firm said it now had full ownership of the 41 acre site, with planning consent for 803,000 square feet of warehouse space.

In addition, Warehouse REIT said it had exchanged contracts to acquire a further 60 acres of land zoned for employment.

As it previously announced, a planning application was submitted for an additional one million square feet.

Subject to planning, the entire scheme had the potential for around 1.8 million square feet of warehouse space in a prime logistics location, with 1.5 miles of junction 16 on the M6 motorway.

The company also reaffirmed its “near-term intention” to move to the main market of the London Stock Exchange.

“Occupational demand saw another record year in 2021, with take-up of UK warehouse space exceeding 50 million square feet, meaning that supply is becoming increasingly constrained,” said Andrew Bird, managing director of Warehouse REIT’s investment adviser Tilstone Partners.

“It is against this backdrop that we have achieved new lettings substantially ahead of estimated rental values, which demonstrates the appeal of Warehouse REIT's space to occupiers and has established a new rental tone across a number of the company's multi-let estates.”

Bird said demand showed no sign of slowing, reflected by the level of space currently under offer at rental levels “materially ahead” of estimated rental values.

“This tightening of supply coupled with continued investment yield compression is underpinning the dual focus on continued asset management successes, alongside bringing forward the company's development pipeline, notably the 100 acres at Radway Green.”

At 1515 GMT, shares in Warehouse REIT were up 2.34% at 166p.