REIT News - August 2021

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REIT Market Overview

The month of July highlighted the changes of investment strategies for REITs as quarterly reporting was underway.

British Land highlighted retail parks where footfall and sales respectively reach 96% and 99% of pre pandemic levels. Its recent £82m investment in a well-let retail park with strong logistics development potential was tangible demonstration of its believe in the sector. 

Palace Capital made clear it will prioritise investment in the office and industrial sectors in carefully selected locations. 

Whilst Regional REIT sold an industrial property portfolio for £45m in line with its stated strategy to exit the industrial sector in preference for higher yielding regional office investments.

Market Activity
(Ticker, Share Price, EPRA NAV per Share, Premium/Discount)

Assura Plc (LON:AGR, 78.3p, 57.3p, +36.6%) 
  • Assura has issued a Trading Update for its first quarter to 30 June 2021. 
  • Key details are: 
  • Growing portfolio of 610 properties with current annualised rent roll of £123.5m;
  • 12 property additions (1 development completion and 11 acquisitions) for total cost of £53m;
  • two development schemes moved onto site in the quarter (including the West Midlands Ambulance Hub announced in June 2021);
  • 11 disposals completed raising proceeds of £15m, above the book value at March 2021;
  • Three lease re-gears completed in the period (£0.1m of existing rent);
  • Currently on site with four capital asset enhancement projects (total spend £2.7m);
  • Currently on site with 17 developments with a total cost of £99m (March 2021: 16, £72m);
  • Immediate development pipeline of 19 schemes, where we expect to be on site within 12 months, totalling a further £121m (March 2021: 17, £111m);
  • Immediate acquisitions pipeline stands at £58m, which we would normally expect to complete in three-six months (March 2021: £46m)
  • 37 lease re-gears covering £4.5m of existing rent roll in the current pipeline;
  • Pipeline of 19 capital asset enhancement projects (projected spend £16m) over the next 2 years;
  • 12-year 1.625% £300m Sustainability Bond issued in June 2021;
  • Following the Sustainability Bond issuance, at 30 June 2021 net debt stood at £954m with undrawn facilities of £205m and a weighted average interest rate of 2.3%.

Assura has announced that it has given notice under its RFC agreement to voluntarily cancel £100m of the existing £225m facility which runs to November 2024.  Following the cancellation, the RCF will stand at £125m and is currently undrawn. 

Big Yellow Group Plc (LON:BYG, 1,452.0p, 889.2p, +63.3%) 

Big Yellow Group has issued an update on trading for the first quarter ended 30 June 2021. Key details are: 

  • Store maximum lettable area (MLA) up 6.3% to 4,984,000sf (30 June 2020: 4,688,000sf);
  • Closing occupancy up 14.6% to 4,490,000sf (30 June 2020: 3,919,000sf);
  • Occupancy growth in the quarter of 289,000sf (30 June 2020: 138,000sf);
  • Closing occupancy (% of MLA) of 90.1% (30 June 2020: 83.6%);
  • Like-for-like closing occupancy of 92.9% (30 June 2020: 83.6%);
  • Total revenue for the quarter up 15.1% to £36.6m (30 June 2020: £31.8m);
  • Like-for-like store revenue up 13.8% to £35.4m (30 June 2020: £31.1m);
  • Average achieved net rent psf up 2.7% to £29.04 (30 June 2020: £28.28);
  • Closing net achieved rent psf up 3.5% to £28.91 (30 June 2020: £27.93);
  • 79 Big Yellow stores increased in occupancy over the quarter by 289,000sf resulting in a closing occupancy of 90.1% (2020: 83.6%);
  • Like-for-like closing occupancy was 92.9%.
BMO Real Estate Investments Limited (LON:BREI, 74.4p, 102.1p, -27.1%) 

BMO Real Estate Investments has announced that its NAV at 30 June 2021 was 102.1p representing an increase of 3.0% from its 31 March 2021 NAV of 99.1p and a NAV total return for the quarter of 3.9%. It also announced that it had collected 96.1% of the £20.9m rent invoiced over the fifteen-month period to 1 June. 

Capital & Counties Properties Plc (LON:CAPC, 170.7p, 199.0p, -14.2%) 

Capital & Counties Properties has announced half year results to 30 June 2021. 

Key details are: 

  • Total equity of £1.7bn (31 December 2020: £1.8bn);
  • EPRA NTA down 6% to 199p per share (31 December 2020: 212p);
  • Total property value down 5.1% (like-for-like) to £1.8bn (31 December 2020: £1.9bn);
  • Group net debt to gross assets ratio of 28% (31 December 2020: 28%);
  • Underlying EPS of nil (H1 2020: 0.3p);
  • Reported net rental income £21.0m (H1 2020: £18.2m);
  • Covent Garden total property value down 4.9% (like-for-like) to £1.7bn;
  • 29 new leases and renewals agreed representing £6.0m contracted income (6% below 31 December 2020 ERV) with a further £3.1m under offer;
  • EPRA vacancy at 3.4% (31 December 2020: 3.5%);
  • 12 new openings scheduled over the course of 2021 including Peloton, Glossier and Ave Mario;
  • 65% of June quarter collected (adjusted for payment plans);
  • Realised value from the sale of two residential-led blocks on Southampton Street for £50m (before costs);
  • Group net debt of £668m (31 December 2020: £710m) and net debt to gross assets of 28% (31 December 2020: 28%);
  • Access to Group liquidity comprising undrawn facilities and cash of £989m (31 December 2020: £1bn);
  • Capital commitments of £5m (31 December 2020: £2m);
  • Weighted average maturity on drawn debt of 5.4 years (31 December 2020: 5.4 years) and average cost of debt of 2.8% (31 December 2020: 2.6%).
Custodian REIT Plc (LON:CREI, 105.0p, 101.7p, +3.2%) 

Custodian REIT has announced that it has sold a 5,242ft vacant children's day nursery in Basingstoke for £648k, £73k ahead of the last published valuation.  The property was part of the initial portfolio acquired on the Company's admission to the London Stock Exchange in 2014. It intends to use the proceeds from the disposal to fund acquisitions better aligned to its stated investment strategy.

Custodian REIT has announced its NAV at 30 June 2021. Key details are: 

  • EPRA EPS down to 1.4p (quarter ended 31 March 2021: 1.5p) due to a £0.3m increase in the doubtful debt provision;
  • NAV total return per share of 7.3%, comprising 1.8% dividends paid and a 5.5% capital increase;
  • NAV per share of 101.7p (31 March 2021: 97.6p);
  • NAV of £427.7m (31 March 2021: £409.9m);
  • Net gearing of 24.3% loan-to-value (31 March 2021: 24.9%);

Custodian REIT has announced that it has unconditionally exchanged on the disposal of a portfolio of properties for £23.355m, with completion due on 29 September 2021. The portfolio comprises five industrial sites in Gateshead, Stockton-on-Tees, Warrington, Stone and Christchurch with a current passing rent of £1.4m.  The properties within the portfolio were acquired either in the seed portfolio at IPO or within subsequent portfolio acquisitions.  The agreed sale price of £23.355m is £4.07m (21%) above the portfolio's 31 March 2021 valuation and £2.13m (10%) above the portfolio's 30 June 2021 valuation and will add 0.5p to the 30 June 2021 NAV per share on scheduled completion.

Derwent London Plc (LON:DLN, 3,636.0p, 3,812.0p, -4.6%) 

Derwent London has issued an update on its rent collection. Key details are: 

  • Received 93% of June 2021 Quarter Day office rents.  This collection rate compares to 75% reported on 7 July 2020 for the June 2020 Quarter Day;
  • Received 89% of total rent, with a further 5% expected later in the quarter;
  • Rent-free periods have been granted on 1% of total rents, mainly for retail and hospitality tenants;
  • 82% of service charges for the June quarter have been received so far;
  • Now collected 94% of the March 2021 quarter rents, with another 1% subject to agreed payment plans;
  • For the December 2020 quarter, received 92% of rents with another 5% subject to payment plans.

Derwent London has announced that it has exchanged contracts to sell its 126,200sf freehold interest in Angel Square, Islington to Tishman Speyer.  The disposal price is £86.5m before costs. Angel Square consists of three multi-let connected buildings around a central courtyard and was acquired in November 2014.  Following a light touch refurbishment, the bulk of the property was let to Expedia (67,500sf) and The Office Group (40,700sf). At December 2020, the total rent passing was £5.0m pa, however leases have since expired and the property will become vacant following the sale. The disposal price, net of costs, represents a substantial premium to the December 2020 book value.

Derwent London and Fora have announced the letting of the entire 6-8 Greencoat Place SW1.  Fora, the premium flexible workspace provider, is taking a 15-year lease with no breaks on the six-floor Derwent London scheme in Victoria, totalling 32,400sf of warehouse-style office space. The average rent is c. £69psf and the overall rental incentive is equivalent to a 34-month rent-free period.  

Great Portland Estates Plc (LON:GPOR, 763.0p, 779.0p, -2.1%) 

Great Portland Estates has announced that it has pre-let 15,200sf of retail space at 70 Oxford Street W1, part of the 1 Newman Street & 70/88 Oxford Street, W1 redevelopment, to competitive socialisation operator Boom Battle Bar (BBB). BBB will offer a unique leisure and gaming experience with a variety of activities, cocktails and street food. BBB has agreed a fifteen-year lease (without break) at an initial minimum rent of £625,000 pa (plus a turnover top-up). They will receive six months' rent free plus a landlord contribution of £500,000.  The letting is conditional upon obtaining a change of planning use and an alcohol licence. The new unit will comprise part ground & the entire lower ground floor, leaving four brand new double height flagship stores totalling 25,900sf and 41,630f of Grade A offices remaining following the successful pre-let of 39,970sf to Exane SA in May 2020. The development reached practical completion on 2 July 2021.

Great Portland Estates has issued a trading update for the quarter to 30 June 2021. Key details are: 

  • £12.7m of new annual rent signed, including £8.0m of retail space, market lettings 9.3% ahead of March 2021 ERV, including a further three lettings at new Flex+ offering at 16 Dufour's Place, W1 (now 90% let or under offer within three months of launch);
  • £14.9m of further lettings under offer (up from £5.5 m at May), 6.7% ahead of March 2021 ERV;
  • £33m of new annual rent in negotiation;
  • 86% of June rent collected to date including amounts covered by rent deposits; 84% excluding deposits (93% from office units; 58% from retail/hospitality/leisure sectors; 94% all other sectors) ahead of March quarter at equivalent date;
  • All offices open for business with 32% occupier utilisation; 92% of retail units open;
  • 1 Newman Street, W1 (122,700sf) completed in July, 38% let including 15,200sf retail letting, good interest in remaining office space;
  • Good progress at major office refurbishment at 50 Finsbury Square, EC2 (128,100sf); now all under offer, forecast 21% profit on cost, targeting NZC, £45m capex to complete (expected Q4 2022);
  • Momentum maintained on four-near term schemes (909,400sf); resolution to grant planning permission achieved at 2 Aldermanbury Square, EC2 (320,500sf new build); c.£800m capex ahead of potential starts in 2022; strong occupier interest;
  • Property LTV of 19.1%, weighted average interest rate of 2.5%, cash/undrawn facilities of £423m;
  • Total prospective capex of c.£900m (including refurbishments);
  • Organic rent roll growth of 104% including four near-term developments.

Great Portland Estates has announced that it has published a Sustainable Finance Framework in respect of potential future debt issuance. The publication of the Framework follows the Group's innovative £450m ESG-linked revolving credit facility (the first of its kind issued by a UK REIT) in January 2020. The Framework provides a context for GPE to potentially issue debt instruments to finance or refinance projects that have a positive environmental and/or social impact, while supporting the Group's sustainability strategy and wider business strategy. The Framework is aligned to internationally recognised principles issued by the International Capital Markets Association (ICMA) and the Loan Markets Association (LMA). DNV Business Assurance Services UK Limited have provided a Second Party Opinion (SPO) which confirms the alignment of the Framework to these principles. NatWest Markets acted as Sustainability Structuring Advisor. 

Hammerson Plc (LON:HMSO, 37.0p, 82.0p, -54.9%) 

Hammerson has announced that since its last update on 20 April 2021, while some Covid-related restrictions have eased in all territories, measures remain in place affecting F&B, leisure and cinema operators in particular, although it expects this to be lifted in the coming weeks. Footfall trends in all territories remain encouraging, with seven-day averages currently sitting at around 70-80% of 2019 levels, following an initial spike on reopening.  Many retailers continue to report high sales and conversion rates as visitors shop with purpose.  These trends have been particularly positive in France during the first few days of the summer sales period. Rent collection rates have continued to improve, with 89% of billable rents collected for FY20, and 68% for H1 21.  Initial Q3 rent collection at 47% is ahead of Q1 and Q2 at the same point in time, and FY21 YTD collection now stands at 62%.  It expects all rent collections to continue to improve as remaining Covid-related restrictions are lifted.  It does not anticipate granting future concessions and all avenues to collect rents due are being pursued. 

Impact Healthcare REIT Plc (LON:IHR, 117.2p, 110.7p, +5.9%) 

Impact Healthcare REIT has issued a business and trading update for the quarter to 30 June 2021. Key details are: 

  • 100% rent collection;
  • NAV at 30 June 2021 of £388.0m, 110.66p per share (31 March 2021: £352.4m, 110.48p);
  • Property portfolio valued at £432.4m (31 March 2021: £427.0m), an increase of £5.4 m, or 1.3% in the quarter;
  • Equity raise of £35 m closed;
  • New £26m RCF secured with NatWest, with an accordion agreement to increase this facility to £50m, subject to lender approval;
  • LTV reduced to 13.7% (31 March 2021: 21.3%).
Land Securities Group Plc (LON:LAND, 712.6p, 985.0p, -27.7%) 

Land Securities Group has confirmed that the first quarterly dividend for the 2021/22 financial year will be 7.0p per share, paid entirely as a property income distribution. It has also reported that, at 7 July 2021, 81% of its net rent due on 24 June had been paid. Of the £18m of rent outstanding, £6m relates to customers who have withheld payment pending documentation of agreed concessions. In early April 2020, it established a customer support fund of £80m for occupiers who most need our help. To date, £50m of rent concessions have been allocated to customers. 

LondonMetric Property Plc (LON:LMP, 248.8p, 190.3p, +30.7%) 

LondonMetric Property has announced that it has exchanged contracts on two new lettings totalling c.260,000sf, each on 15-year lease terms, with ten years to break. At its Bedford Link development, LondonMetric has let 172,000sf to Carlton Packaging, one of the UK and Europe's leading e-commerce packaging suppliers, at a rent of £1.33m pa (£7.70psf), which is subject to five-yearly rent reviews at the higher of CPI plus 1% or open market. The recently developed warehouse is BREEAM Excellent and, under the terms of the letting, 250kW of solar PV will be installed. The letting crystallises a yield on cost of 7.3%. At Grange Park, Northampton, following a minor refurbishment, LondonMetric has re-let 86,000sf to My 1st Years, a supplier of baby and children's gifts, at a rent of £0.65m pa (£7.50psf), representing a 29% uplift versus the previous passing rent. The rent is subject to five-yearly reviews of CPI plus 1%.

LXI REIT Plc (LON:LXI, 144.2p, 125.7p, +14.7%) 

LXi REIT has announced that it has raised gross proceeds of £100m from its Placing and approx. a further £4m of gross proceeds from its PrimaryBid Offer. The Placing was significantly oversubscribed above the £100m cap and a scaling-back exercise was therefore carried out.

LXi REIT has reported collection of 100% of the rent due for the quarter ending September 2021 (Q3 2021). Following this level of rent collection, it has reaffirmed its intention to pay a quarterly dividend of 1.5p per share for the second quarter of the financial year, which is expected to be declared in November 2021 and fully covered by net rental income for the quarter. This quarterly dividend rate reflects the second of four equal instalments totalling 6.0p per share that it is targeting for that financial year, representing a 4.3% increase on its pre-Covid-19 dividend rate of 5.75p per share. 

McKay Securities Plc (LON:MCKS, 227.0p, 309.0p, -26.5%) 

McKay Securities has issued an update on trading for the quarter to 30 June 2021 ahead of its AGM today. Key details are: 

  • 95.0% of all March 2021 quarter rents received, ahead of the 82.0% received at the same period last year.  Collection of the majority of the outstanding 5.0% anticipated on conclusion of ongoing discussions;
  • 97.0% of rent received for the year to 31 March 2021, with collection of a further 1.0% still expected;
  • Completed of four new lettings with a combined contracted rent of £225,630 pa, in line with ERV at 31 March 2021;
  • Continued strong retention of 68.8% of occupiers at lease break and expiry, retaining combined contracted rent of £494,020 pa, 2.2% ahead of ERV;
  • Protected and extended contracted rent totalling £723,750 pa;
  • Lease expiries totalling £565,550 pa, versus an ERV of £806,850 pa, providing the opportunity to refurbish to improve letting prospects to unlock asset rental reversions;
  • Recently completed and current office refurbishment projects at Corinthian House, Croydon; Crown Square, Woking and Swan Court, Wimbledon;
  • Progress with feasibility studies and potential scheme design at Sopwith Drive, Weybridge (logistics: 63,140sf) and Great Brighams Mead, Reading (office: 84,840sf) informing asset strategy regarding possible refurbishment, redevelopment or sale options;
  • 22.8% portfolio reversion of £5.84 million pa (as at 31 March 2021);
  • Total investment under share buyback programme to date of £3.62m through the purchase of 1.66 million shares at an average discount to EPRA NTA of 29.1%;
  • Net debt of £141.60m (31 March 2021: £141.75m), providing  cash and undrawn facilities of circa £100m;
  • LTV of 32.3% (31 March 2021: 32.4%), based on the external portfolio valuation of £437.90m (as at 31 March 2021);
  • No loan renewals until April 2024.
NewRiver REIT Plc (LON:NRR, 83.7p, 151.0p, -44.6%) 

NewRiver REIT has announced that it has entered into an agreement for the sale of the entire issued share capital of its pub business, Hawthorn Leisure REIT to Admiral Taverns for a gross aggregate cash consideration of approx. £222.3m. Hawthorn comprises 674 leased & tenanted and operator managed community pubs. The net aggregate proceeds are expected to be used to reduce net debt, significantly strengthening NewRiver's balance sheet by resetting LTV to below 40%.

NewRiver REIT has issued a trading update in respect of its Q1 ended 30 June 2021. Key details are: 

  • Since full year results on 3 June 2021 rent collected or alternative payment terms agreed in relation to the first quarter of the financial year has now increased to 87%;
  • Of the total second quarter rent demanded so far, 79% has either been collected or had alternative payment terms agreed with occupiers. The rent collection figures for the first and second quarters are tracking ahead of the same quarters last year and we expect these figures to continue to improve as we progress through the year;
  • In FY22 to date completed 252,500sf of leasing deals across our retail portfolio. 92,200sf of the deals signed to date represented long-term new lettings and renewals, accounting for £0.9m of annualised rent;
  • Long-term deals agreed so far in FY22 are on terms in line with ERV. These transactions include a significant lease renewal with Homebase in Poole, a renewal with Superdrug in Doncaster and a new letting with Poundstretcher in Bexleyheath;
  • Retail occupancy increased over 1% to 97.0% since the March 2021 position - average retail rent remains affordable at £11.54psf (31 March 2021: £11.51psf);
  • Strategy of disposing of non-core retail assets has continued, with £74.3m of disposals now completed, exchanged or under offer in FY22 to date. This figure comprises £1.1m of completed disposals, £9.3m of exchanged, and £63.9m under offer. These disposals are in line with March 2021 valuations;
  • Repaid £70m of RCF during the quarter. At 30 June 2021, had £84m of cash reserves and £115m of undrawn revolving credit facilities;
  • Total accessible liquidity position of £199m remained the same as at year end.
Palace Capital Plc (LON:PCA, 264.0p, 350.0p, -24.6%) 

Palace Capital has announced that it has completed the sale of Bridge House, High Street in Weybridge, Surrey as part of its £30m programme of non-core disposals. The asset is unencumbered and therefore the net proceeds of the £3.7m sale, which is at a 6% premium to book value, will revert to the Company. The Company has also announced that it has agreed a further seven residential sales at Hudson Quarter in York to the value of £2.4m, with 70 apartments now remaining. A total of 50 apartments at Hudson Quarter have been sold and completed, delivering an aggregate of £15m, which has been used to reduce the original £26.5m development facility to its current level of £5.7m. The Company expects to have the facility paid down in full by the end of the current calendar year.

Palace Capital announced that rent collection in the last financial year averaged 95% and the Board expects to sustain this level throughout the current financial year.  At the same time, the Board will take steps to address the cost base to make it more efficient for the size of the Company. Palace Capital will prioritise investment in the office and industrial sectors in carefully selected locations outside of London. The team will continue to utilise its strong regional network and asset management expertise to identify, acquire, and refurbish assets where appropriate, to make the space fit for purpose, with a particular regard to the growing need for buildings to satisfy improving EPC ratings.  Aligned to this, the Company will continue to execute its previously announced disposal programme with £9.4 m of disposals secured since the start of the current financial year. Palace Capital is prioritising this disposal programme as well as the sale of the apartments at Hudson Quarter, York to recycle capital into new opportunities. The Company believes the next 12 months will provide the opportunity to release more value from its existing portfolio and build on the strong prospects for growth in the regions.  

Picton Property Income Limited (LON:PCTN, 92.1p, 99.9p, -7.8%) 

Picton Property Income has announced a 3.2% increase in NAV for the quarter to 30 June 2021 and a further 6.3% dividend increase. Key details are: 

  • Net assets of £545.7m (31 March 2021: £528.2m);
  • NAV/EPRA NTA per share up 3.2% to 99.9p (31 March 2021: 96.8p);
  • Total return for the quarter of 4.0% (31 March 2021: 2.2%);
  • LTV of 20.6% (31 March 2021: 20.9%);
  • Like-for-like portfolio valuation uplift of 2.9%;
  • Completed seven lettings, across all sectors, 2% below the March 2021 ERV with a combined annual rent of £0.9m;
  • Secured an average increase of 21% against the previous passing rent from six rent reviews, all in the industrial sector, with a combined annual rent of £0.5m - 15% ahead of the March 2021 ERV;
  • Occupancy of 91% (31 March 2021: 91%);
  • 94% of June 2021 rents have been collected or are expected to be received under monthly payment plans - collection rate is expected to improve further over the coming weeks;
  • Rent collection rate of 95% for the March 2021 quarter.
Primary Health Properties Plc (LON:PHP, 163.8p, 115.4p, +41.9%) 

Primary Health Properties has announced half year results to 30 June 2021. Key details are: 

  • Annualised rental income on a like-for-like basis of £1.3m or 1.0%, from rent reviews and asset management projects (FY 2020: £2.0m or 1.6%; FY 2019: £1.9m or 1.5%);
  • Average uplift of 1.5% pa on rent reviews (FY 2020: 1.8%; FY 2019: 1.9%);
  • Contracted annualised rent roll of £136.1 m (31 December 2020: £135.2m);
  • Completed the internalisation of the Group's management structure - immediate annual cost savings of approx. £4.0m, equivalent to 0.3p per share;
  • Four forward funded developments completed with a net development cost of £20.1m at Mountain Ash, Wales, Llanbradach, Wales, Epsom, Surrey and Eastbourne, East Sussex;
  • Adjusted NTA per share up 2.2% to 115.4p (31 December 2020: 112.9p);
  • Property portfolio valued at £2.655bn (31 December 2020: £2.576bn) reflecting a NIY of 4.70% (31 December 2020: 4.81%). A revaluation surplus was generated in the period of £66.9m (30 June 2020: £10.5m), representing growth of 2.6% (30 June 2020: 0.4%);
  • Portfolio's metrics continue to reflect the secure, long-term and predictable income stream with occupancy at 99.7% (31 December 2020: 99.6%) and a WAULT of 11.8 years (31 December 2020: 12.1 years);
  • Net debt of £1,085.2m (31 December 2020: £1,055.7m);
  • LTV ratio was 40.9% (31 December 2020: 41.0%);
  • After capital commitments has undrawn loan facilities and cash on deposit totalling £335.0m (31 December 2020: £361.5m) providing significant liquidity headroom. Cash on deposit totals £72.5m. 
Real Estate Investors Plc (LON:RLE, 41.6p, 55.2p, -24.7%) 

Real Estate Investors has issued a trading update for its H! to 30 June 2021. 

Key details are: 

  • Rent collection for H1 2021 of 97.22% (adjusted for monthly and deferred agreements);
  • Completed eight asset disposals totalling £10.7m (an aggregate uplift of 10.3% above book value);
  • Pipeline disposals of £5.53m (£5.35m unconditionally exchanged and £0.18m conditionally exchanged);
  • Occupancy levels at 83.43% with near-term potential to rise to 88.15% (based on 4.72% in pipeline lettings) with the reduction in occupancy dominated by the loss of Npower in Oldbury and Premier Inn in West Bromwich;
  • Improved WAULT to 5.01 years to break and 6.70 years to expiry (FY 2020: 4.84 years/6.54 years);
  • March 2021 renewal of £51m facility with National Westminster Bank for three  years at 2.25% above LIBOR with £4.1m repaid since March 2021;
  • As at 1 July 2021, hedge facility has improved by £716,000 for half year to 30 June 2021;
  • All banking covenants continue to be met with headroom available.
Regional REIT Limited (LON:RGL, 88.5p, 98.6p, -10.2%) 

Regional REIT has announced it has exchanged and completed on the sale of Marston Business Park, Tockwith, Wetherby, a multi-let industrial and business park for £8.6m. After capital expenditure, this disposal reflects a 36.5% uplift from the acquisition price and is a 4.9% premium to the 31 December 2020 valuation, with a net initial yield of 7.2%. The 171,155sf property is set in 41 acres and has 24 tenants. Over the period of ownership of this property, several asset management initiatives have been instigated, including the recently obtained planning consent for six individual plots totalling a floor area of some 170,000sf on 11.62 acres.

Regional REIT has announced that it has exchanged and completed on the disposal of Arena Point, Leeds for £10.65m, representing an uplift of 15.8% against the 31 December 2020 valuation. The purchaser intends to demolish the 19-storey office block (76,176sf) to make way for a 43-storey tower, providing accommodation for 705 students. The disposal represents the final part of the long term business plan for this asset, which the Company acquired with the adjacent two-storey casino and pub, known as the Podium Buildings, in March 2016 for £10.5m. In July 2018, the Podium Buildings were sold to Unite Students for £12.2m for development into what is now the 16 and 27-storey towers at White Rose View. The final disposal of Arena Point has now secured profits after all costs for the site of some £9.3m, producing a geared internal rate of return of 24.6%.

Regional REIT has issued an update on rent collection. Key details are: 

  • At 13 July 2021, collected 94.7% of the rent due for Q2 2021. This comprised rent received of 90.9%, monthly rents of 2.2% and agreed collection plans of 1.6%;
  • The 93.7% of rent received compares with the equivalent period in 2020 of 85.2%;
  • Remains in supportive and ongoing discussions with tenants regarding the remainder of the outstanding rent and expects to collect the vast majority of it in due course.

Regional REIT has announced that it has exchanged contracts with ARA Dunedin for the disposal of an industrial property portfolio for £45m. The completion is conditional upon the purchaser having in place the required financing. This reflects a net initial yield of 6.75% and is 7.5% above the valuation at 31 December 2020. After capital expenditure, the sale represents an uplift of 18.0% from the acquisition price. The portfolio comprises seven industrial properties (801,787sf) located in Bromborough, Erith, Nottingham, Scunthorpe, Telford, Winsford and Wisbech. Completion is expected to take place in August 2021. The sale is in line with the Company's stated strategy to exit the industrial sector in preference for higher yielding regional office investments, this disposal marks the sale of 62% (by value) of its industrial holdings held as at 31 December 2020. 

Residential Secure Income Plc (LON:RESI, 103.5p, 105.5p, -1.9%) 

Residential Secure Income has announced its NAV at 30 June 2021 and provided an update on recent corporate activity. Key details are: 

  • Net Recurring Income of £1.9m or 1.1p a share, up 10% on the quarter (31 March 2021: £1.7m or 1.0p a share);
  • £19m of income generating shared ownership acquisitions in March;
  • Continued occupancy ramp-ups in retirement and the pre-existing shared ownership portfolio;
  • 99% of rent collected in the quarter, unchanged throughout the Covid-19 crisis;
  • IFRS NAV per share of 105.5p (31 March 2021: 105.1p);
  • Total property portfolio of 3,059 homes with value of £348m up 1% or £3.5 m on a like-for-like fair value basis.
Schroder European Real Estate Investment Trust Plc (LON:SERE, 102.5p, 147.4p, -30.5%) 

Schroder European Real Estate Investment Trust has announced half year results to 31 March 2021. Key details are: 

  • Rent collection at approx. 92% for the six-month period - includes 94% of rent collected for the quarter ended 31 March 2021;
  •  €60m of investment firepower;
  • Portfolio value, including cash, of €259.9m (31 March 2020: €247.3m) - directly held properties delivered like-for-like valuation growth of €5.6m, or 2.3%;
  • NAV of €197.1 m or 147.4 cps (30 September 2020: €201.8 m), down €4.7m over the six-month period;
  • Loss of €0.7m (H1 2020: profit of €4.9m);
  • NAV total return of minus 0.4%;
  • PBT of €0.8m (H1 2020: €5.7m);
  • Underlying EPRA earnings of €2.8m (H1 2020: €4.3m);
  • LTV of 11% net of €57.0m of available cash (29% gross of cash), with weighted average total interest rate of 1.4%;
  • Concluded five new leases and re-gears in Hamburg, Paris Saint-Cloud and Seville, totalling 1,100sqm, at a weighted lease term of 4.1 years, generating a 3.9% increase in annualised income relative to the previous rent;
  • Occupancy of 95%, with a 5.8 years average lease term to expiry;
  • Underlying property portfolio total return of 2.4% (H1 2020: 4.0%);
  • Post period end an acquisition exchanged for a logistics property in Nantes, western France, for €6.15m, reflecting a NIY of 5.5%.

Schroder European Real Estate Investment Trust has issued an update on rent collection and announced its NAV at 30 June 2021. Key details are: 

  • Approx. 94% of rent due for the quarter ended 30 June 2021 - previous two quarters of 92%;
  • At 30 June 2021, portfolio was valued at €204.7m, an increase of 0.9%, or €1.8m, on the 31 March 2021 valuation of €202.9m;
  • Excluding the 50% interest in Metromar Seville, which has now been reflected at nil in the balance sheet, the portfolio increased in value by €2.3, or 1.2%;
  • LTV of approx. 29% (gross of cash) as at 30 June 2021, with no recourse to the
  • Company and no debt maturity before 2023. 
Secure Income REIT Plc (LON:SIR, 393.3p, 377.0p, +4.3%) 

Secure Income REIT has announced that 98.7% of its £25.7m of rent that fell due between 8 April 2021 and 7 July 2021 has been collected. As a consequence of the delay from 21 June in the lifting of government regulations in response to the pandemic and the anticipated full reopening of UK businesses, a deferral of £0.6m of rents in total that would otherwise have been due from one tenant in May and June 2021 has been agreed.  Those rents will be receivable in the period between September 2021 and August 2022. Only 0.3% of the annualised gross rent roll is outstanding to date for the current and prior rent due dates.

SEGRO Plc (LON:SGRO, 1,217.5p, 909.0p, +33.9%) 

SEGRO has announced that it has agreed the sale of a portfolio of six Italian urban warehouses for €127.5m to AXA IM Alts, on behalf of clients. The warehouses were developed by SEGRO-Vailog for a global online retail company to support the growth of its distribution network in Italy. The portfolio has a total floor space of 56,000sqm and the warehouses are located in Florence, Burago, Padua, Parma and Verona. Five of the sales have already completed and the sixth will complete later this year following practical completion of additional works.

SEGRO has announced half year results to 30 June 2021. Key details are: 

  • Adjusted pre-tax profit up 19% to £168m (H1 2020: £141 m);
  • Adjusted EPS up 10% to 13.8 p (H1 2020: 12.5 p);
  • Adjusted NAV per share up 12% to 909 p (31 December 2020: 814 p);
  • £38 m of new headline rent commitments, including £21m of new pre-let agreements, and a 12% average uplift on rent reviews and renewals (UK: 16%, CE: 2%);
  • 1.3m sqm of projects under construction or in advanced pre-let discussions equating to £96m of potential rent, of which 75% has been pre-let;
  • Access to over £1.2bn of available liquidity and a low level of gearing reflected in an LTV of 21% (31 December 2020: 24%). 
Stenprop Limited (LON:STP, 3,325.0p, 147.0p, +2,161.9%) 

Stenprop has announced that it has acquired Bradley Hall Trading Estate, Wigan from HIMOR (Property) Limited for £20.6m, reflecting a NIY of 6.43% and a capital value of £67.40sf on the MLI space and £8.95psf on the yard areas. The property comprises 275,079sf of terraced MLI units ranging in size from 344sf to 28,896sf, and 230,062sf of income producing yard areas.  It is 100% let to a diverse range of local and national businesses and generates a total annual passing rent of £1.4m, equating to an average rent of £4.61psf on the built units and £0.61psf on the yard areas.

Stenprop has issued a trading update for the period 1 April to 30 June 2021. 

Key details are: 

  • Like-for-like passing rent up 3.7% (previous quarter: 1.8%) and up 8.0% over 12 months;
  • Average passing rent up 2.5% to £5.60psf (previous quarter: £5.46psf);
  • Occupancy across the multi let industrial (MLI) portfolio increased by 1% to 94.7% as at 30 June 2021, up from 93.7% at 31 March 2021 and 91.0% on 31 March 2020;
  • 18% weighted average uplift on the previous passing rent on new lettings and 25% on lease renewals, averaging 21% across all transactions (previous quarter: 24% and 15% respectively, averaging 20% across all transactions);
  • £1.44m pa of rental income contracted (previous quarter: £1.54m) through 39 new lettings and 27 lease renewals over 213,519sf (previous quarter: 50 new lettings and 33 renewals over 212,522sf);
  • Like-for-like ERV of the portfolio up 5.5% in the 12 months to 30 June 2021, resulting in a 10.1% premium to the average passing rent (previous quarter: 12.8% premium);
  • At quarter end, 76 leasing transactions under offer on over 286,000sf (previous quarter: 66 transactions over 234,000sf of space), of which 113,000sf related to new lettings and 173,000sf to existing customer renewals (previous quarter: 101,000sf and 133,000f respectively);
  • Net LTV at 28%. 
The British Land Company Plc (LON:BLND, 520.2p, 648.0p, -19.7%) 
  • The British Land Company has issued an update ahead. Key details are: 
  • 183,000sf campus lettings in the first quarter including 134,000sf to JLL at 1 Broadgate; under offer on a further 419,000sf;
  • Across the retail portfolio, footfall and sales 86% and 94% of pre pandemic levels in the 7 weeks since the reopening of indoor hospitality on 17 May; 
  • Retail parks continuing to clearly outperform; footfall and sales 96% and 99% of pre pandemic levels;
  • 85% of June 2021 rent collected to date; Offices 99%, Retail 71%; Retail collection 24ppt ahead of rent collection at the same point for the December quarter and 17ppt ahead of the same point for the March quarter;
  • March rent collection now 91% overall, 99% in Offices and 85% in Retail;
  • Practical completion of 1 Triton Square, a net zero carbon development at Regent's Place;
  • Commitment to develop Aldgate Place Phase 2, a 136,000sf mixed use, residential-led development;
  • Thurrock Shopping Park, a well-let retail park just off the M25 with strong logistics development potential, acquired for £82m, £3.81m an acre;
  • Indications that retail park values are rising, with those assets valued quarterly up 0.7% for the quarter to June;
  • Under offer on the sale of Wardrobe Court, a standalone residential building in the City of London;
  • Refinancing of 100 Liverpool Street completed, raising a new £420m 5 year 'Green Loan'. 
The PRS REIT Plc (LON:PRSR, 104.5p, 96.2p, +8.6%) 

The PRS REIT has issued an update on activity over the fourth quarter of its financial year to 30 June 2021. Key details are: 

  • 394 new rental homes added to the portfolio in the Q4, taking total housing delivery for the year to 30 June 2021 to 1,902 new homes (2020: 909). A further 1,096 homes are contracted and at varying stages of the construction process;
  • Size of the portfolio at 30 June 2021 increased to 3,984 completed homes, with an ERV of £37.5m pa (2020: 2,082 homes/ERV of £19.1m). Now over three quarters of the way towards its initial target of 5,200 homes, with an ERV of approx. £50.0m pa. The balance of homes is expected to be delivered from existing contracted sites and further development opportunities in the pipeline;
  • Of the 3,984 completed homes, 3,888 (97.6%) were occupied at 30 June 2021, and a further 30 homes were reserved for qualified applicants with rental deposits paid;
  • Rent collected in the period (relative to rent invoiced) was 98.4%. As the size of the portfolio grows, total arrears continue to remain low at £0.4m.
The Unite Group Plc (LON:UTG, 1,157.5p, 837.0p, +38.3%) 

The Unite Group has announced the quarterly property valuation of the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV) as at 30 June 2021, together with an update on reservations for the 2021/22 academic year. Key details are: 

  • USAF's property portfolio valued at £2,795m, reflecting a 1.4% increase on a like-for-like basis during the quarter. The portfolio comprises 29,627 beds in 76 properties across 20 University towns and cities in the UK;
  • LSAV's investment portfolio valued at £1,702m, reflecting a 1.9% increase and 2bps of yield compression on a like-for-like basis during the quarter. Following the acquisition of a further two London properties from Unite during the quarter, LSAV's investment portfolio now comprises 9,716 beds across 14 properties in London and Aston Student Village in Birmingham;
  • Like-for-like valuation increase in Q2 reflects the sales performance to date for the 2021/22 academic year and the expectation of a return to full occupancy, as well as the impact of yield compression in LSAV. The USAF and LSAV portfolios are valued at weighted average yields of 5.3% and 4.3% respectively;
  • Across the Group's total property portfolio, 83% of rooms are now reserved for the 2021/22 academic year, overtaking the prior year but behind pre-pandemic levels in 2019/20 (2020/21: 81%, 2019/20: 89%);
  • Now collected 95% of rent due for the 2020/21 academic year, excluding the impact of the 10-week rental discount offered to customers for the second semester. This represents 92% of forecast rent for the academic year as a whole;
  • Rent collection to date remains consistent with guidance for EPRA EPS of 27-30p for FY2021.

The Unite Group has announced half year results to 30 June 2021. Key details are: 

  • 96% rent collection for the 2020/21 academic year;
  • PBT of £130.4m (H1 2020: £73.9m loss), driven by EPRA earnings and a valuation gain of £54.3m in the period (H1 2020: £135.2m loss);
  • Total accounting return of 3.9% (H1 2020: (2.3%);
  • Reservations for 2021/22 academic year at 85% (2020/21: 82%, 2019/20: 91%);
  • Targeting 95-98% occupancy for 2021/22 and rental growth of 2-3%;
  • EPRA NTA of 837p, up 2% (31 December 2020: 818p);
  • 1.5% increase in property values in H1 on a like-for-like basis;
  • Secured pipeline of £769m and 5,048 beds, generating a 6.5% yield on cost;
  • Exchanged contracts for a new c.1,000 bed development site in Stratford in London, subject to planning;
  • LTV reduced through disposals to 30% at 30 June 20213 (31 December 2020: 34%), maintaining 35% target over the medium term;
  • £261m of disposals contracted in H1 (Unite share) at a blended yield of 4.9%.
Workspace Group (LON:WKP, 863.5p, 938.0p, -7.9%) 

Workspace Group has issued a business update for its Q1 to 30 June 2021. 

Key details are: 

  • Customer demand now running at pre-Covid levels, with an average of 947 enquiries per month in the quarter (Q1 2020/21: 506) and 125 lettings per month (Q1 2020/21: 43);
  • 95% of rent due for the first quarter and 90% of rent due for the second quarter collected to date, ahead of the level of rents collected at the same point in the previous quarter;
  • Like-for-like occupancy up 1.1% in the quarter to 82.7%;
  • Pricing beginning to stabilise as customer demand improves, average rent psf down by 2.4% to £35.69 in the quarter, around half the decline seen in the previous quarter;
  • Three projects will complete in the second quarter providing 117,000 of new and upgraded space;
  • Pro forma LTV unchanged at 24% at 30 June 2021 based on the March 2021 valuation.

Data sourced through the London Stock Exchange and RNS announcements.