REIT News - December 2021
Welcome to Ince Corporate Finance’s REIT News update...
REIT Market Overview
The month of November saw a significant volume of REIT activity, particularly with regard to acquisitions and quarterly financial and operating updates.
Land Securities Group announced the acquisition of a majority stake (75%) in MediaCity, the 37-acre media, digital and tech hub in Salford, Greater Manchester, for £425.6m. LondonMetric Property announced the acquisition of two logistics warehouses for £135.6m. Home REIT acquired additional 19 portfolios comprising 173 high quality properties located across England for an aggregate price of £62.6m. Industrials REIT purchased three multi-let estates in Birkenhead, Coatbridge, and Stockton on Tees for a total consideration of £18m.
(Ticker, Share Price, EPRA NAV per Share, Premium/Discount)
AEW UK REIT Plc (LON:AEWU, 111.0p, 110.0p, +0.9%)
AEW UK REIT has announced half year Results to 30 September 2021. Key details are:
- NAV of £174.29m or 110.01p per share (31 March 2021: £157.08m and 99.15p);
- Operating profit before fair value changes of £5.88m (H1 2020: £5.93m);
- PBT of £23.55m and EPS of 14.86p (H1 2020: £5.72m and 3.61p) - includes a £16.60m gain arising from changes to the fair values of investment properties;
- EPRA EPS of 3.45p (H1 2020: 3.41p);
- Total dividends per share of 4.00p declared in relation to the period (H1 2020: 4.00p);
- Total Return of 28.37% (H1 2020: 16.13%);
- Balance of £50.50m drawn down (31 March 2021: £39.50m) of £60.00m (31 March 2021: £60.00m) term credit facility with RBS and was geared to 28.97% of NAV (31 March 2021: 25.15%) - can draw £9.50m of the remaining facility up to the maximum 35% loan to NAV at drawdown;
- Cash balances of £15.16m (31 March 2021: £17.45m);
- Property portfolio had a valuation of £206.69m across 35 properties (31 March 2021: £179.00m across 34 properties) and a historical cost of £197.69 m (31 March 2021: £173.28 m);
- Acquired two properties for a total purchase price of £18.54m (year ended 31 March 2021: one property for £5.40m). Post period-end acquired a retail park asset in Coventry for £16.41m;
- One disposal, Langthwaite Industrial Estate, South Kirkby for £10.84m (year ended 31 March 2021: two properties for £29.30m). Post period-end, disposed of Wella Warehouse, Basingstoke, for £5.86m;
- EPRA vacancy rate of 8.59% (31 March 2021: 8.96%);
- Rental income was £7.87m (H1 2020: £8.12m);
- EPRA NIY of 6.45% (31 March 2021: 7.37%);
- WAULT of 4.00 years to break and 6.20 years to expiry (31 March 2021: 4.43 years to break and 6.71 years to expiry).
Alternative Income REIT Plc (LON:AIRE, 72.8p, 87.8p, -17.1%)
Alternative Income REIT has issued an operating update and its NAV at 30 September 2021. Key details are:
- Collected 91.8% of the current quarter's rent and this increases to 98.3% when taking into account the tenants who are contracted to pay monthly. Of the remaining 1.7%, 1.4% will be collected during Q4 2021 through monthly payments, with an expected collection rate this quarter of at least 99.7%;
- Current quarter's rent collections are split 80% quarterly and 20% monthly;
- Portfolio is fully let, save for an area of land at St Helens recently vacated, on which negotiations are ongoing with the neighbouring tenant, Bgen Ltd, for a higher rent;
- 55% of the portfolio's contracted rent is due to be reviewed during the year to June 2022. There are eight indexed annual reviews (expected increases averaging 2% to 3.5%), two indexed 3/5 yearly reviews (expected increases averaging 19% to 20%) and one lease expiry;
- 57% of the portfolio's contracted rent is due to be reviewed during the year to June 2023. There will be eight indexed annual reviews (expected increases averaging 2% to 3.5%), four indexed 3/5 yearly reviews (expected increases averaging 7.5% to 9%) and two lease expiries/tenant's breaks.
- Declared an interim quarterly dividend of 1.30p per share for the quarter ended 30 September 2021, a 4% increase on the 1.25p per share interim dividend for the same period last year;
- Reaffirmed target annual dividend of 5.5p per share with full dividend cover expected by September 2022;
- EPRA EPS for the quarter to 30 September 2021 was 1.59 per share, representing dividend cover for the quarter of 122% (year ended 30 June 2021: 5.55p per share; 108% cover);
- Portfolio valued at £111.23m (30 June 2021: £109.23m) a 1.83% quarter on quarter increase. Increase in its income quarter on quarter and the NIY on the portfolio was 5.84%, compared with 5.93% on 30 June 2021;
- NAV was £70.68, 87.80p per share, reflecting growth of 2.60% over the period due to increases during the quarter in portfolio valuation and income earned;
- WAULT of 17.4 years (30 June 2021: 17.8 years) to the earlier of break and expiry and 19.6 years (30 June 2021: 19.8 years) to expiry;
- Exchanged contracts with occupier of the Audi car showroom in Huddersfield for them to buy the Company's freehold interest for £5.5m, representing a 3.8% premium on the book value at June 2021 and a net exit yield of 6.75%.
Assura Plc (LON:AGR, 67.7p, 57.2p, +18.4%)
Assura has announced half year results to 30 September 2021. Key details ae:
- Passing rent roll up 5% to £127.5m (31 March 2021: £121.7m);
- WAULT 11.7 years (31 March 2021: 11.9 years);
- PBT up 58% to £69.4m (H1 2020: £43.8 m);
- EPS of 2.6p (H! 2020: 1.7p);
- EPRA earnings up 7% to £40.9m (H1 2020: £35.8 m);
- EPRA EPS of 1.5p (H1 2020: 1.4p);
- Portfolio up 6% to £2,595m (31 March 2021: £2,453m);
- Portfolio NIY at 4.56% (31 March 2021: 4.56%), valuation gain of £28.1m in the six months;
- Current quarterly dividend of 0.74p (March 2021: 0.71p);
- 27 property acquisitions for total cost of £117m (yield on cost 4.9%, WAULT 16.3 years, £82m acquisitions, £35m development completions). Total development pipeline of £480m of which on site £72m;
- 11 disposals completed for proceeds of £1m generating a modest profit over book value;
- Five asset enhancement capital projects on site (£3.7m spend);
- Five lease re-gears (£0.2m existing rent roll) and 144 rent reviews completed (2.1% uplift);
- Total contracted rental income increased to £1.61bn (March 2021: £1.57bn);
- LTV of 39% and weighted average interest rate of 2.30%;
- Issued 12-year £300 m Sustainability Bond with coupon of 1.625% in June 2021;
- Net debt of £1,007m on a fully unsecured basis;
- Undrawn facilities of £125 m and cash of £241.6 m.
Assura has also announced a proposed placing, by way of accelerated bookbuild, of up to approx. 10% of the Company's existing issued share capital to raise gross proceeds of approximately £190m. The Company is also conducting a retail offer of up to the sterling equivalent of €8m at the same price as the placing shares through the PrimaryBid platform.
British Land Company Plc (LON:BLND, 518.2p, 681.0p, -23.9%)
British Land Company has announced half year results to 30 September 2021. Key details are:
- £102m of acquisitions in Cambridge and Guildford, building exposure to innovation sectors;
- £189m of acquisitions with potential for urban logistics in London, total GDV of urban logistics pipeline of c.£600m;
- £210m investment into retail parks;
- 718,000sf of new Campus development commitments bringing total development on site to 1.6m sf;
- £196m sales; 6.0% ahead of book value;
- Portfolio value up 2.9% with Campuses up 3.0% and Retail & Fulfilment up 2.7% and Retail Parks up 7.1%;
- 15 bps yield contraction overall; 6 bps yield contraction in Campuses; 54 bps in Retail Parks; rate of yield expansion slowing in Shopping Centres;
- 1.8m sf leasing activity across the portfolio;
- Rent collection: 96% for the half, close to pre-pandemic levels in retail, with offices fully collected;
- Underlying EPS up 22.9%;
- EPRA NTA up 5.1% to 681p;
- HY22 dividend of 10.32p per share, representing 80% of underlying EPS;
- 6.1% Total Accounting Return;
- LTV at 33.4% with 43% headroom to Group debt covenants;
- £1.5bn undrawn facilities and cash with no requirement to refinance until late 2024.
Civitas Social Housing Plc (LON:CSH, 93.2p, 108.5p, -14.1%)
Civitas Social Housing has announced its quarterly NAV at 30 September 2021 and market update. Key details are:
- Rents received as normal with no COVID-19 impact during the quarter;
- IFRS NAV per share of 108.49p (30 June 2021: 108.42p);
- Second 1.3875p quarterly dividend declared in line with full year target of 5.55p;
- M&G facility part-invested with balance available for pipeline opportunities;
- Ongoing engagement with existing and new shareholders;
- Share buy-backs undertaken with shares held in treasury for reissue.
Custodian REIT Plc (LON:CREI, 98.9p, 106.0p, -6.7%)
Custodian REIT has announced that it has sold a 22,720sf car showroom in Stafford for £4.9m, £1.15m (31%) ahead of the 30 June 2021 valuation, representing a NIY of 5.8%. The property is let to VW Group UK Limited and was purchased in July 2018 for £4.55m. Following the disposal, net gearing has decreased to 18.5%.
Custodian REIT has announced its NAV at 30 September 2021 and highlights for the period from 1 July to 30 September 2021. Key details are:
- Since the Period end, aggregate £46.5m invested in a portfolio of ten office, retail and industrial assets through the corporate acquisition of DRUM Income Plus REIT, and separately, an industrial unit in York;
- Property portfolio value of £565.3m (30 June 2021: £575.4m);
- £32.3m aggregate valuation increase comprising a £2.3m property valuation uplift and £30.0m of general valuation increases, primarily due to hardening yields in the industrial and logistics sector;
- 95% of rent collected relating to the six-month period, adjusted for contractual rent deferrals (year to 31 March 2021: 91%, 2020: 88%);
- £4.2m profit from the disposal of ten properties for aggregate consideration of £38.5m;
- £12.5m invested in three property acquisitions;
- NAV of £445.9m (30 June 2021: £427.7m);
- NAV per share of 106.0p (30 June 2021: 101.7p, 31 March 2021: 97.6p);
- Net gearing decreased to 19.6% LTV (30 June 2021: 24.3%);
- Dividend per share approved for the period of 1.25p (quarter ended 30 June 2021: 1.25p);
- Target quarterly dividend per share increased by 10% to 1.375p commencing from the quarter ending 31 December 2021, resulting in target dividends per share of no less than 5.25p for the year ending 31 March 2022 and 5.5p for the year ending 31 March 2023;
- EPRA EPS of 3.0p (H1 2020: 2.6p) due to the movement in the doubtful debt provision during the six-month period changing from a £2.9m increase in 2020 to a £0.1m decrease;
- Basic and diluted EPS of 11.4p (H1 2020: -3.8p) primarily due to property portfolio valuation increases of £32.3m (H1 2020: £27.4m decrease);
- PBT of £48.1m (H1 2020: loss of £16.1m);
- NAV per share total return of 11.7% (H1 2020: -3.7%) comprising 3.1% income (H1 2020: 2.6%) and a 8.6% capital change (H1 2020: -6.3% capital change);
- £0.6m of new equity raised at a premium of 5.9% to dividend adjusted NAV.
Derwent London Plc (LON:DLN, 3,353.0p, 3,864.0p, -13.2%)
Derwent London has issued an update on its Q3 2021. Key details are:
- £5.5m of new lettings achieved in H2 to date at an average 2.4% above December 2020 ERV;
- Year to date lettings of £9.4m at an average 0.7% above ERV, with a further £3.3m under offer;
- EPRA vacancy rate at 1.9%, down from 3.3% at H1 2021;
- 97% of total September 2021 quarter day rents collected;
- Completion in October of the acquisition of two properties and the formation of a 50:50 JV, from Lazari Investments, for £279m (after costs);
- Disposal of Angel Square EC1 and acquisition of the outstanding headlease at Bush House, South West Wing WC2 completed in August;
- LTV 16.6%1, rising to c.21% on a proforma basis allowing for Q4 acquisitions completed to date;
- Undrawn facilities and cash of £555.2m at 30 September 2021.
Derwent London has also announced that it has exchanged contracts to acquire the 100-year leasehold interest in Conoco House and Quadrant House at 230 Blackfriars Road SE1 in Southwark for £55.0m before costs. The ground rent is a fixed £5,000 pa. Conoco House, a 1970s office building comprising 60,300sf, is multi-let at a passing rent of £2.1m (£41psf on average) with all leases expiring in 2025, with tenant breaks in 2023. The NIY is 3.5%, which would rise to c. 4.2% on letting the 9,400sf of vacant space. The acquisition cost, excluding Quadrant House, equates to £880psf on the existing space. The adjoining Quadrant House is a 36-unit residential building let to 2074 at a nominal rent. Together they occupy a 0.8 acre site, which includes 30 car parking spaces, and has medium-term potential for a substantial office-led development.
Empiric Student Property Plc (LON:ESP, 81.3p, 105.7p, -23.1%)
Empiric Student Property has issued a business and trading update. Key details are:
- Achieved a good performance at the start of the academic year 2021/22, with 81% revenue occupancy across its portfolio (AY20/21 70%);
- Collected 98% of rent due this term for the AY21/22;
- Two pilot refurbishments in Bristol and Leeds completed - upgraded rooms have been let at higher rental levels;
- Regular dividend payments are expected to be re-instated from 1 January 2022.
Great Portland Estates Plc (LON:GPOR, 721.0p, 796.0p, -9.4%)
Great Portland Estates has announced half year results to 30 September 20211. Key details are:
- Portfolio valuation of £2.5bn, up 2.0%2 (+2.8% offices and -0.8% retail); developments up 29.7%;
- Rental values up 1.6% (2.3% offices and -1.0% retail); yield contraction of 1bp;
- Total property return of 3.7%, with capital return of 2.2%;
- Upgraded portfolio rental value guidance, now +2.0% to +5.0% for the financial year;
- IFRS NAV and EPRA NTA per share of 796p, up 2.2%;
- EPRA earnings of £18.7m, down 9.2% on H1 2020;
- EPRA EPS of 7.4p, down 9.8%;
- IFRS profit after tax of £62.2m (H1 2020: loss of £154.8m);
- Total accounting return of 3.2%;
- Interim dividend per share maintained at 4.7p;
- £27.0m pa of new annual rent across 358,800sf, market lettings 9.8% above March 2021 ERV;
- Flex space now c.15% of office portfolio, appraising further 217,000sf First Flex+ space at 16 Dufour's Place, W1 fully let, average rent £191psf, 10.5% ahead of ERV;
- £2.4m lettings under offer, 7.1% ahead of March 2021 ERV, further c.£16m in negotiation;
- Vacancy up to 14.0% on Newman Street completion; 5.1% excl. completed developments (31 March 2021: 6.6%);
- Rent roll up 6.2% to £101.1m, with total potential growth of 91%;
- Rent collection since December 2019: 92% collected (offices 95%), no delinquencies;
- LTV of 16.7%, weighted average interest rate of 2.0% (fully drawn basis), cash and undrawn facilities of £486m;
- Total prospective capex of £924m (incl. refurbishments); reviewing £0.9bn of acquisitions and £0.3bn of sales.
Great Portland Estates has also announced the launch of its Social Impact Strategy, building on its Sustainability Statement of Intent "The Time is Now" launched in May 2020. The strategy sets out how it will deliver the third pillar of its Sustainability Statement of Intent, namely to create a lasting positive social impact in communities and £10 of social value by 2030. The strategy is intrinsically linked to its Roadmap to Net Zero, recognising the need to support a just transition to a low carbon economy. It has incorporated its approach to diversity and inclusion within its social impact strategy.
Hammerson Plc (LON:HMSO, 31.5p, 69.0p, -54.3%)
Hammerson has announced that it notes recent press speculation and confirmed that it is in discussions on terms of a possible disposal of Silverburn, its flagship destination near Glasgow, which is held in a 50/50 JV with CPPIB. It says that there can be no certainty that a transaction will take place but confirms the pricing under discussion is £140m.
Home REIT Plc (LON:HOME, 118.5p, 104.6p, +13.3%)
Home REIT has announced that it has deployed a further £62.6m of the proceeds raised in the Company's £350m equity issue in September 2021. £229m of the net proceeds of the issue has now been deployed at a weighted average net initial yield of 5.91%, ahead of the pipeline forecast as disclosed during the issue. Since its announcement of 18 October 2021, the Company has acquired additional 19 portfolios comprising 173 high quality properties located across England for an aggregate purchase price of £62.6m (including acquisition costs). These properties add 829 beds to the portfolio, bringing the total to over 6,500, whilst also further enhancing the geographic diversification of the portfolio. They are let on an average lease length of 25 years at low and sustainable rents, on new, unbroken, full repairing and insuring leases to 12 different specialist registered homeless charities, providing them with sought-after long-term security of tenure and therefore much needed stability for their residents. The leases are subject to annual upward-only rent reviews, index-linked to the CPI, with an annual collar and cap of 1% and 4% respectively.
Industrials REIT Ltd - Formerly Stenprop - (LON:MLI, 183.5p, 147.0p, +24.8%)
Industrials REIT has announced that three multi-let estates in Birkenhead, Coatbridge, and Stockton on Tees, have been purchased in separate transactions for a total consideration of £18m, reflecting a blended NIY of 7.1% and a capital value of £69psf. Junction 1 Business Park, Birkenhead has been acquired from listed property company for £10.8m, reflecting a NIY 7.1% and a capital value of £64psf. The 167,735sf, 26-unit estate is 100% let and generates a total annual passing rent of £822,151, which equates to an average rent of £4.90psf. Arkgrove Industrial Estate, Stockton on Tees has been acquired from a private seller for £4.2m, reflecting a NIY of 6.5% and a capital value of £78psf. It is located immediately to the north of the A1046 Portrack Lane, in the heart of the Teesside region's prime industrial and retail warehouse hub. It comprises a terrace of 14 recently refurbished units, together with a standalone trade counter unit as well as a secure yard, and totals 54,177sf. The estate, which is currently 100% let, generates an annual passing rent of £291,712, which equates to an average passing rent of £5.38psf. Dundyvan Industrial Estate in Coatbridge has been acquired from a property company for £3.0m, reflecting a net initial yield of 7.8% and a capital value of £75psf. The purpose-built MLI estate totals 40,067sf across 29 units ranging from 600sf to 3,900sf and is currently 98% let. It occupies a strategic location southwest of Coatbridge Town Centre, adjacent to both the M74 and M8 motorways, and just 8.5 miles from Glasgow city centre. The estate generates a total annual passing rent of £246,680, which equates to an average rent of £6.30psf.
Land Securities Group Plc (LON:LAND, 741.4p, 1,012.0p, -26.7%)
Land Securities Group has announced that it has acquired a majority stake in MediaCity, the 37-acre media, digital and tech hub in Salford, Greater Manchester previously owned by a 50:50 JV between Legal & General and Peel L&P. Landsec will partner with Peel L&P who will retain a 25% stake and continue to serve as asset and development manager. MediaCity has a gross asset value of £567.5m. Landsec will pay a net purchase price of £425.6m for the 75% interest. The transaction includes £293.6m of debt (£220.2m on a proportionate basis), reducing Landsec's equity investment to £207.6m which is satisfied in cash drawn from existing facilities. Landsec will also have an obligation to pay a further amount capped at £15m linked to building remediation works, which will be completed post-transaction. The waterside destination is home to some of the world's most exciting creative, tech and media brands, from BBC North and ITV to Ericsson, The Hut Group, Kellogg's and over 250 creative and tech businesses as well as schools and universities. The biggest tech and media hub outside London, MediaCity produces 50,000 hours of content every year, and is home to 8,000 residents and workers. Phase one was completed ten years ago and comprises 1.48m sf across 11 buildings including workspace, studios, incubator labs, residential as well as ancillary leisure and retail. It is 96% let with a WAULT of just under ten years. It generates £31.1m of net operating income per annum (100%), reflecting a 5.8% NIY. Over half of the income has rent reviews linked to RPI, with collars and caps guaranteeing future rental uplifts. Phase 2 has already seen the completion of two residential towers - 'The Green Rooms' and 'The Lightbox' as well as the award-winning mixed-use commercial space, the 'Tomorrow building'. This second phase has outline planning consent for an additional 1.6m sf including office and residential, with an estimated GDV of £750m, bringing the total space for phase two to 2.3m sf.
Land Securities Group has announced half year results to 30 September 2021. Key details are:
- EPRA earnings up 56.5% to £180m (H1 2020: £115m);
- Gross rental income down 3.8% to £282m;
- PBT of £275m (H1 2020: loss of £835m);
- EPRA EPS up 56.8% to 24.3p H 2020: 15.5p);
- Dividend in the period of 15.5p per share (2020: 12.0p);
- Combined Portfolio valued at £11.0bn, with a valuation surplus of £81m or 0.8%;
- EPRA NTA per share up 2.7% to 1,012p (31 March 2021: 985p);
- Total business return of 3.7%;
- LTV ratio at 31.8% (31 March 2021: 32.2%);
- Adjusted net debt of £3.5bn (31 March 2021: £3.5bn);
- Weighted average cost of debt of 2.3% (30 September 2020: 2.2%);
- Weighted average maturity of debt at 10.9 years (31 March 2021: 11.5 years);
- Cash and available facilities of £1.6bn;
- Announced £250m of disposals; progressed strategic acquisitions totalling £616m;
- On-site with 1.0m sf of committed development, and with recent and planned acquisitions near-term pipeline of 2.5m sf of potential development opportunity.
LondonMetric Property Plc (LON:LMP, 269.0p, 213.4p, +26.1%)
LondonMetric Property has announced the acquisition of two logistics warehouses for £135.6m in separate transactions, reflecting a blended NIY of 4.2% and a reversionary yield of 4.8%. The properties generate a rent of £6.0m pa with 100% of the income benefiting from RPI linked rent reviews. The warehouses have a WAULT of 22 years and comprise:
- c. 700,000sf, acquired for £97.0m at a NIY of 4.0% and let for another 23 years at a rent of £4.1m pa, reflecting a reversionary £6.00psf, with the next review in three years. The highly automated warehouse sits adjacent to a key UK motorway junction on a premier logistics hub and has further development potential of up to 180,000sf;
- 296,000sf acquired for £38.6m at a NIY of 4.5% and pre-let to a rapidly expanding e-commerce company, on a 20 year lease at a rent of £1.9m pa, equating to £6.25psf. The warehouse is located at Port One Logistics Park, Ipswich, and will be used by the occupier to import and distribute products. Development completes in spring 2022.
The buildings are highly specified and certified BREEAM Very Good. Completion of the c. 700,000sf acquisition is expected to occur in January 2022.
LondonMetric Property has announced half year results to 30 September 2021. Key details are:
- Total Property Return of 10.4%;
- Capital return of 7.9% (IPD All Property: 5.4%), logistics delivered 9.7%;
- EPRA NTA per share up 12.1% to 213.4p, driven by 22.9p valuation gain;
- Total Accounting Return of 14.5%;
- Net rental income up 3.6% to £63.5m;
- EPRA cost ratio down 50 bps to 13.2%;
- EPRA earnings up 4.5% to £44.2m;
- IFRS reported profit up 199% to £254.1m;
- Dividend up 4.8% to 4.4p, 111% covered, including Q2 dividend declared of 2.2p;
- Distribution weighting increased to 74%, including urban logistics at 42%, with grocery-led long income at 23%;
- £161m of acquisitions, largely urban logistics, with a WAULT of 15 years and 72% of rent subject to contractual uplifts;
- £168m of disposals, largely mature or non-core assets, with a WAULT of ten years;
- Post period end, £144m of acquisitions with a WAULT of 21 years, primarily two logistics warehouses acquired for £136m;
- 76 asset management initiatives delivering £3.9m pa additional income and 3.0% like for like income growth;
- Rent reviews +13% with urban open market reviews +25%;
- Lettings signed with WAULT of 12 years;
- Occupancy increased to 98.9% and WAULT of 11.6 years with only 10.1% of income expiring in next three years;
- LTV of 31.1% with weighted average debt maturity of 7.2 years and cost of debt at 2.5%;
- Further £150 m debt facility post period end extends financing arrangements.
LondonMetric also announced a placing and retail offer to raise gross proceeds of approx. £175m. The total number of shares to be issued is expected to represent approximately 7.4% of the Company's issued share capital. It intends that the proceeds will be used to fund existing committed and under offer deals, which total approx. £282m, including:
- £39m used to fund a committed and pre-let logistics development asset;
- Approx. £122m used to acquire a South East focused portfolio of 15 assets which is 75% logistics and 25% long income;
- Approx. £53m used to forward fund a pre-let logistics development;
- Approx. £31m used to fund urban logistics redevelopment opportunities;
- Approx. £22m used to fund a grocery and logistics sale and leaseback.
LXI REIT Plc (LON:LXI, 147.2p, 134.0p, +9.9%)
LXi REIT has announced half year results to 30 September 2021. Key details are:
- Total NAV return of 9.0% (H1 2020: -0.6%);
- Dividend per share up 13.2% to 3.00p (H1 2020: 2.65p);
- Adjusted EPS up 6.1% to 3.5p (H1 2020: 3.3p);
- Total expense ratio (annualised) of 1.0% (H1 2020: 1.0%);
- Portfolio value up 4.9% to £1,216.6m (31 March 2021: £938.4m);
- EPRA NTA per share up 6.6% to 134.0p (31 March 2021: 125.7p);
- LTV of 25% (31 March 2021: 23%);
- Rental income up 25.1% to £25.4m (H1 2020: £20.3m);
- Operating profit before fair value changes up 19.3% to £21.0m (H1 2020: £17.6m);
- IFRS EPS of 11.3p (H1 2020: loss of 0.8p);
- Investment property up 34.3% to £1,192.1m (31 March 2021: £887.5m);
- Net assets up 21.4% to £948.5m (31 March 2021: £781.4m);
- IFRS NAV per share up 7.8% to 135.5p (31 March 2021: 125.7p);
- Acquired 44 separate properties for a combined purchase price of £248.6m (including forward funding commitments) and at an average NIY of 5.23%;
- Sold one property generating a geared IRR on disposal of 26% pa and at a price reflecting an exit NIY of 3.85%;
- 96% of the contracted rents contain upward only index-linked rent reviews or fixed uplifts;
- Portfolio WAULT of 23-years to first tenant break option.
McKay Securities Plc (LON:MCKS, 219.0p, 322.0p, -32.0%)
McKay Securities has announced half year results to 30 September 2021. Key details are:
- Portfolio valuation increased to £454.95m (31 March 2021: £437.90m), generating a 2.7% surplus;
- Portfolio ERV of £31.20m pa (31 March 2021: £31.45m pa);
- Adjusted PBT down 22.4% to £4.09m (H1 2020: £5.27m), reflecting a 12.3% reduction in gross rental income to £11.18m (H1 2020: £12.75m), following significant disposal in prior period;
- IFRS PBT of £15.44m (H1 2020: £15.02m loss);
- Adjusted EPS down 21.1% to 4.41 p (H1 2020: 5.59p);
- IFRS EPS of 16.67p (H1 2020: 15.93p loss);
- EPRA EPS of 4.57p (H1 2020: 5.53p);
- IFRS NAV per share up 4.2% to 322p (31 March 2021: 309p);
- EPRA NTA per share up 4.2% to 322p (31 March 2021: 309p);
- LTV of 33.6% (31 March 2021: 32.4%), with cash and undrawn facilities of £92.35m;
- Share buy-back programme of up to £10.00m (announced in March 2021) maintained, accretive to both NAV per share and earnings per share; 2,628,016 shares acquired by period-end at a cost of £5.86m;
- Interim dividend of 2.9p per share, a 3.6% increase on the dividend paid for the prior period;
- Rent collection remained robust, with 99.3% of amounts due for the year to March 2021 received or agreed, and 96.4% of rent for the year to date (three quarters) already received.
New River REIT Plc (LON:NRR, 84.9p, 131.0p, -35.2%)
NewRiver REIT has announced half year results to 30 September 2021. Key details are:
- Underlying FFO up 67% to £15.5m (H1 2020: £9.3m);
- UFFO per share up 70% to 5.1p (H1 2020: 3.0p);
- Interim dividend of 4.1p per share (H1 2020: nil);
- Retail net property income up 6.8% to £25.2m;
- Retail portfolio valued at £702m; down 3.1% on like-for-like basis;
- Retail IFRS loss after tax of £16.6m (H1 2020: loss of £79.3m);
- Pub IFRS loss after tax of £33.3m including loss on disposal (H1 2020: loss of £13.0m);
- EPRA NTA per share down 13% to 131p (31 March 2021: 151p) - 11p reduction as a result of Hawthorn disposal;
- LTV reduced to 39.4% (31 March 2021: 50.6%);
- Net debt reduced by 44% to £276.4m (31 March 2021: £493.3m);
- Weighted average debt maturity extended from 4.3 years to 5.2 years and no maturity on drawn debt until 2028;
- Fully unsecured balance sheet with drawn debt reduced by £335m;
- Cash and available liquidity of £162.3m;
- Completed the disposal of pub business, Hawthorn, for gross proceeds of £224.0m;
- Completed £24.4m of retail disposals at 2.2% premium to valuation; on track to exit Work Out assets by end FY 2023;
- Disposal of "Regeneration" Shopping Centre in Penge delivered as planned post period end for gross proceeds of £12.4m, reflecting NIY of 3.1% and 35% premium to March 2021 valuation;
- Rent cash collection for H1 averaging 90% and Q3 tracking at almost 90%;
- 383,800sf new lettings and renewals completed; long-term transactions at average 11.6% premium to ERV;
- Retail occupancy of 95.8% (31 March 2021: 95.8%).
Palace Capital Plc (LON:PCA, 281.9p, 362.0p, -22.1%)
Palace Capital has announced half year results to 30 September 2021. Key details are:
- IFRS PBT up 211% to £8.0m (H1 2020: £7.2m loss);
- Basic EPS up 212% to 17.4p (H1 2020: 15.5p loss);
- Adjusted EPS of 8.7p, reflecting a 1.4x cover of the 6.25p dividend for the period;
- EPRA NTA per share of 362p, up 3.6% (31 March 2021: 350p);
- IFRS net assets of £163.6m (31 March 2021: £157.8m);
- EPRA earnings of £3.7m (H1 2020: £3.2m);
- 97% of rents collected for the June quarter and 90% of all rents due on and since the September quarter day collected, both higher than the equivalent quarter in 2020 - expected to increase to 95% when the monthly payments for December are received;
- LTV of 36% (31 March 2021: 42%);
- Cash reserves and immediately available facilities of £18.7m;
- £26.5m development facility from Barclays Bank now reduced to £1.6m, which will be repaid in full by the end of this month;
- Net debt of £93.2m (31 March 2021: £118.9m);
- 64 apartments completed or exchanged at Hudson Quarter for a total of £21.0m with an additional 8 under offer to the value of £3.0m;
- £18.9m of property sold or exchanged under the £30m disposal strategy, of which £12.0m was exchanged or completed by 30 September 2021, and a further £6.9m exchanged or completed since 30 September 2021. All disposals were above book value;
- 29 lease events in the period providing £0.6m pa additional income, 3% ahead of ERV.
Palace Capital has announced that it has sold 24 Blackwater Way, Aldershot to a private property company for £2.44m, reflecting a 14% premium to book value and a more than 200% premium to the original investment at acquisition, equating to a 514% total return. It acquired part of the property from Quintain in 2013 and subsequently purchased the adjoining long leasehold, applying its active asset management skills which resulted in a 20% increase in the annual rental income with an extended lease term. The property is an industrial building with a floor area of 28,000sf and is let to BHW Automotive on a 10-year lease from September 2019 at £228,000 pa. The freehold is held by Rushmoor Borough Council on a 125-year term from 2003, with provision for ground rent reviews every ten years. The next review is due in 2023 and the current ground rent payable is £47,000 pa so the current net income is £181,000 pa.
Picton Property Income Limited (LON:PCTN, 98.6p, 105.0p, -6.1%)
Picton Property Income has announced half year results to 30 September 2021. Key details are:
- Property valuation of £745m (31 March 2021: £682m);
- NAV up 8.6% to £574m (31 March 2021: £528m);
- NAV per share of 105p (31 March 2021: 97p);
- Profit after tax of £54.4m (H1 2020: £3.7m);
- EPRA earnings of £10.9m (H1 2020: £10.1m;
- EPS of 10.0p (H1 2020: 0.7p);
- EPRA EPS of 2.0p (H1 2020: 1.8p);
- Total return of 10.2% (H1 2020: 0.7%);
- Total shareholder return of 12.7% (H1 2020: -28.3%);
- Total dividend per share of 1.65p (H1 2020: 1.25p);
- Dividend cover of 121% (H1 2020: 148%);
- LTV of 22%;
- Invested £4.4m in upgrading and repositioning assets;
- Completed the acquisition of a freehold, city centre industrial estate for £13.1m, before costs;
- Sold a non-core retail asset for £0.75m, before costs, 16.3% ahead of the March 2021 valuation;
- Occupancy increased from 91% to 93%;
- 15 lettings / agreements to lease completed, securing £2.4m pa, 2.2% above the March 2021 ERV;
- Six lease renewals/regears completed, retaining £0.3m pa, 5.4% above the March 2021 ERV;
- Eight rent reviews completed, securing an uplift of £0.1m pa, 10.8% above the March 2021 ERV;
- Received 96% of the rent due for the six months to September 2021;
- To date 97% of the September 2021 quarter’s rent has been collected or is expected to be received under monthly payment plans.
Primary Health Properties Plc (LON:PHP, 149.1p, 115.4p, +29.2%)
Primary Health Properties has announced that it has acquired the entire issued share capital of Peak Health Solutions, whose sole asset is the Lambgates Health Centre, Glossop for a total consideration of £5m. The property is a modern, purpose-built primary care facility, which is fully let to a GP practice providing 100% government backed income. The lease has an unexpired term of over 20 years, which is accretive to the overall portfolio WAULT and the lot size is in line with the portfolio average.
Primary Health Properties has also announced that it has acquired the Bersted Green Surgery, West Sussex, for a total consideration of £5.34m. The property is a modern purpose-built primary care facility, which is fully let to a substantial GP practice and a pharmacy. The lease has an unexpired term of over 14 years, which is accretive to the overall portfolio WAULT. The transaction increases PHP's portfolio to 519 assets, of which 20 are in Ireland, with a contracted rent roll of over £139m.
Regional REIT Limited (LON:RGL, 90.8p, 99.1p, -8.4%)
Regional REIT has issued a trading update for the period 1 July to 30 September 2021. Key details are:
- Exchanged on 35 leases to new tenants since 1 January 2021, totalling 134,523sf, of which 11 leases have been exchanged since 30 June 2021, totalling 19,050sf. When fully occupied these 35 new leases will provide £1.7m pa of rental income. The 11 leases exchanged since 30 June 2021 will provide £0.3m pa of rental income;
- Retention of occupancy by area remains high at 82.1%;
- At 30 September 2021, 169 properties, 1,498 units and 1,074 tenants, totalling c.£915.6m of gross property assets value;
- Offices (by value) were 90.0% of the portfolio (31 December 2020: 83.5%), Industrial sites 5.3% (31 December 2020: 11.1%), Retail 3.3% (31 December 2020: 4.1%), and Other 1.4% (31 December 2020: 1.3%);
- Rent roll £75.5m (30 June 2021: £61.1m); ERV £94.8m (30 June 2021: £75.1m);
- EPRA occupancy (by ERV) 83.0% versus 85.7% as at 30 June 2021; 30 September 2021 like-for-like (versus 30 September 2020) EPRA occupancy was 82.5% (88.9%);
- EPRA occupancy was impacted by the £236.0m portfolio acquisition made in Q3 2021, with an EPRA occupancy (by ERV) of 78.4%;
- Average lot size c. £5.4m (31 December 2020: c. £4.8m);
- Net LTV c. 42.5% (31 December 2020: 40.8%);
- Gross borrowings £437.5m (31 December 2020; £366.2m);
- Cash and cash equivalent balances £48.1m (31 December 2020: £67.4m);
- Cost of debt (including hedging) of 3.3% pa (31 December 2020: 3.3% pa);
- As at 5 November 2021, collected 94.3% of the rent due for Q3 2021. This comprised rent received of 91.1%, monthly rents of 1.4% and agreed collection plans of 1.8%;
- Rent received from 1 January 2021 to 5 November 2021 amounted to 97.1%, comprising of rent received of 94.9%, monthly rents of 0.6% and agreed collection plans of 1.6%. The rent received of 94.9% compares favourably with the equivalent period in 2020 of 93.2%.
Residential Secure Income Plc (LON:RESI, 104.0p, 107.9p, -3.6%)
Residential Secure Income has announced full year results to 30 September 2021. Key details are:
- EPRA adjusted earnings up 42%, to £7.1m (FY 2020: £5.0m);
- Net rental income up 16%, to £13.2m (FY 2020: £11.3m);
- EPRA NTA total return of 7.5% (FY 2020: minus 0.1%);
- EPRA NTA of £184.7m, or 107.9p, up 2.7% (30 September 2020: 105.1p);
- Investment property valuation up 2.5%, or £7.7m, to £351m, driven by rental growth and shared ownership portfolio full occupancy;
- Weighted average debt maturity of 22 years, 46% LTV ratio;
- Average cost of debt fell to 2.3% at year end, from 2.6% a year earlier;
- Shared ownership occupancy rose to almost 100% due to strong demand;
- £40m deployed into 351 shared ownership homes, exceeding £34m target;
- Retirement voids reduced to 7% in H2 2021, in line with pre Covid-19 average;
- Rent collection of 99% for the year, in line with normal economic conditions.
Safestore Holdings (LON:SAFE, 1,351.0p, 596.0p, +126.7%)
Safestore Holdings has issued a trading update for its Q4 to 31 October 2021. Key details are:
- Revenue up 21.0% and for the full year up 15.5%;
- Like-for-like group revenue for the year up 13.8%;
- UK up 16.8%;
- Paris up 4.3%.
- Like-for-like closing occupancy of 85.1% (up 5.0ppts on Q4 2020);
- Like-for-like average occupancy for the year up 9.2%;
- Like-for-like average storage rate for final quarter up 10.8% and up 2.4% for the year;
- New freehold development site acquired at London Old Kent Road which will add 76,500sf of MLA;
- Planning permissions granted for previously announced 48,000sf MLA Northern Madrid and 30,000sf MLA Southern Barcelona sites;
- Planning permission granted for extension of Winchester store adding 11,000sf of MLA;
- Property pipeline now at 800,000sf of MLA;
- Full year earnings to 31 October 2021 anticipated to be slightly ahead of previous guidance of 39.5p to 40p of Adjusted Diluted EPRA EPS.
Schroder Real Estate Investment Trust Plc (LON:SREI, 51.1p, 65.8p, -22.3%)
Schroder Real Estate Investment Trust has announced that, since its update on 20 September 2021, it has exchanged or completed 13 new lettings, renewals and reviews, which will generate £300,000 pa of rental income and increase contracted rental income by £185,000 pa. Alongside this, it is set to deliver 80,000sf of operationally Net Zero Carbon industrial, storage and distribution space at Stanley Green Trading Estate after receipt of a resolution to grant planning permission. The development is expected to be the first to achieve this status in the North West.
Schroder Real Estate Investment Trust has announced the acquisition of a portfolio of four industrial assets in the north west of England for £19.85m, reflecting a NIY of 6.9% and a capital value of £53psf. The properties are:
- Valley Road Industrial Estate, Birkenhead – acquired for £11.4m, reflecting a NIY of 6.8%, a reversionary yield of 7.8% and an average capital value of £60psf. The ten acre estate comprises 190,000sf of warehouse space and ancillary offices across 15 units, of which 41% by area have been recently refurbished. The estate is let to seven tenants generating a combined rent of £830,000pa, reflecting an average rent of £4.36psf. This compares with an ERV of £950,000pa, or £4.99psf;
- Coral Products, Haydock Industrial Estate, Haydock - a 98,551sf manufacturing and recycling facility leased to Coral Product. The purchase price of £4.9m reflects a NIY of 6.6% and a capital value of £49psf. Coral occupies the entire site on a lease expiring in January 2031, with a tenant break in 2026, at a rent of £340,000 pa or £3.45psf. This compares with an ERV of £394,000pa or £4.00psf;
- Newfield Fabrications, Sandbach, Cheshire - acquired two assets let to Newfield Fabrications, for a combined £3.6m, which reflects a NIY of 7.4% and a capital value of £42psf. The first asset comprises a 77,880sf manufacturing and distribution facility on a 4.1 acre site, let on a 13.9 year term at a rent of £247,000 pa, or £3.17psf. The lease benefits from five yearly rent reviews linked to RPI, subject to a minimum increase of 2% pa and a cap of 4% pa. The second asset comprises an 8,000sf industrial unit also let for 13.9 years at a rent of £36,000 pa, or £4.50 psf. The lease also benefits from five yearly rent reviews linked to the RPI, subject to a minimum increase of 2% and a cap of 4%pa. The property has an EPC rating of C.
Schroder Real Estate Investment Trust has announced half year results to 30 September 2021. Key details are:
- NAV up 9.0% to £323.4m or 65.8 pps (31 March 2021: £296.8m or 60.4 pps);
- NAV total return of 11.3%;
- EPRA earnings of £8.3m (H1 2020: £5.1m);
- IFRS profit of £33.2m (H1 2020: loss of £8.8m);
- Underlying portfolio total return of 8.9%;
- LTV, net of all cash, of 30.7%;
- Dividends paid during the period totalled £6.5m, or 1.33pps, an increase of 8% over the period, with a further 7.5% increase announced for the quarter to 30 September 2021, to be paid in December;
- Dividend cover of 127% based on EPRA earnings;
- Reduction in the Investment Manager's fees to generate an annualised saving of approximately £650,000 pa, effective from 1 July 2021;
- Rent collection rate of 92% during the period, rising to 98% for the quarter to December 2021;
- Including post period activity, 50 new lettings, renewals and reviews completed, generating an additional £800,000 pa of rental income;
- Portfolio vacancy of 4.9%.
Shaftesbury Plc (LON:SHB, 604.0p, 619.0p, -2.4%)
Shaftesbury has announced its Sustainability and Net Zero Carbon Commitments, together with the publication of its Net Zero Carbon Roadmap. Together, these commitments and the roadmap set out the Group's priorities for addressing the climate change challenge and continuing to engage with and support the local community and other stakeholders to ensure it continues to be a responsible, sustainable business in the years ahead. In view of the growing importance of sustainability across all aspects of the Group's activities, the Board has established a Sustainability Committee to oversee the evolution of its strategies, activities and progress on achieving its goals, encompassing both the roadmap to becoming a net zero carbon business by 2030 and wider sustainability commitments.
Shaftesbury has announced full year results to 30 September 2021. Key details are:
- Leasing transactions with a rental value of £33.9m completed (FY 2020: £23.6m); c. 60% by rental value concluded in the second half;
- Full year commercial lettings and renewals totalled £20.6m, concluded on average 8.0% below 30 September 2020 ERV; H2 £12.7m, concluded on average 0.7% above 31 March 2021 ERV;
- Commercial rent reviews (£3.4m) concluded on average 10.2% above previous rents;
- 373 residential lettings (£9.9m), on average 7.8% below previous rents;
- Momentum continued with £5.4m of lettings and renewals in the two months since 30 September 2021;
- EPRA vacancy at 6.0% of ERV, falling to 4.9% since year end, trending towards its long-term pre-Covid average (peak at 31 March 2021 11.9%);
- 52% of contracted rent collected in the first nine months of the year, rising to 75% in the final quarter as restrictions were removed fully and occupier support tapered;
- 80% of October rent collected to date; further collections expected;
- Net property income down 12.9% to £64.7m (FY 2020: £74.3m) due to occupier support, reduced rent collections and increased vacancy, particularly in the first half of the financial year - 8.5% like-for-like decrease in rental income - charges for expected credit losses and impairments: £17.7m (2020: £21.9m) - increased vacancy-related costs including business rates and lower service charge recoveries, higher letting costs reflecting high volume of leasing transactions, additional costs due to pandemic-related measures;
- Loss after tax of £194.9m (FY 2020: loss of £699.5m);
- EPRA earnings of £13.3m, down 54.8% (FY 2020: £29.4m);
- EPRA NTA of £6.19, down 15.0% (FY 2020 restated: £7.28) due to revaluation deficits and the equity raise in November 2020.
Standard Life Investment Property Income Trust Limited (LON:SLI, 73.7p, 93.1p, -20.8%)
Standard Life Investments Property Income Trust has announced its NAV at 30 September 2021. Key details are:
- NAV per share was 93.1p (30 June 2021: 88.3p), an increase of 5.4% for Q3 2021, resulting in a NAV total return, including dividends, of 6.5% for the quarter;
- Portfolio valuation (before CAPEX) increased by 4.7% on a like-for-like basis;
- Sold a small office in Bishops Stortford for £3.75m as part of the future-fit portfolio strategy and acquired 1,440 hectares of open moorland in the Scottish highlands as part of the net zero carbon strategy;
- Two lease renewals completed securing £286,500 pa, and a new letting securing £137,400 pa;
- Significant financial resources available for investment of £73m in the form of a RCF of £55m plus uncommitted cash after dividend and other financial commitments of £18m;
- LTV of 18.1% - debt currently has an overall blended interest rate of 2.725% pa;
- Dividend for Q3, 2021 maintained at 0.8925p.
Standard Life Investments Property Income Trust has announced the following asset management initiatives:
- Two new leases have been completed. The vacant industrial unit in Dover that represented 2% of portfolio voids has been let to a Government agency on a ten year lease (with tenant break in year 5) securing an annual rent of just over £600,000 pa. The new rent is 25% higher than the previous rent on the building. In addition, a letting has been completed on a 5,700sf suite at Hagley Rd Birmingham, maintaining the rental tone of £20psf;
- Two rent reviews have also been completed, the first on a logistics unit in Bristol showing a 12% increase compared to the previous rent, and the second on an office, also in Bristol, securing a 30% increase in rent. Combined, the two give the Company £95,710 pa in additional rent.
Supermarket Income REIT Plc (LON:SUPR, 122.3p, 108.0p, +13.2%)
Supermarket Income REIT has announced the acquisition of a Sainsbury's supermarket in Swansea, South Wales, and a Tesco supermarket in Maidstone, Kent, from Argo Real Estate for a total purchase price of £73.0m (excluding acquisition costs), reflecting a combined net initial yield of 4.6%. The Sainsbury's store opened in 1989 and was refurbished in 2016. The seven-acre city centre site comprises a 65,000sf net sales area supermarket, an 18-pump petrol filling station and over 500 car parking spaces. The store has a purpose-built online fulfilment centre, which operates 16 vans, supporting Sainsbury's online grocery network across the region. It is being acquired with an unexpired lease term of 27 years, with five-yearly, upwards only, open market rent reviews. The Tesco site in Maidstone, Kent, was purpose built for Tesco in 1990 and extensively refurbished in 2007. This seven-acre site comprises a 39,000sf net sales area supermarket, a 12-pump petrol filling station, 369 car parking spaces and a small parade of adjoining units. It is being acquired with an unexpired lease term of 13 years, with five-yearly, upwards only, open market rent reviews.
Supermarket Income REIT has announced the acquisition of a Sainsbury's supermarket in Cannock, Staffordshire, from a client of CBRE Investment Management for £75.8m (excluding acquisition costs), representing a NIY of 4.0%. The store opened in 1997 and was extensively refurbished in 2011. This 9.1 acre site comprises a 73,000sf net sales area supermarket, a 12-pump petrol filling station and 490 car parking spaces. The store has a purpose-built online fulfilment centre, which operates 12 vans, forming a key part of Sainsbury's online grocery network across the region. The asset is being acquired with an unexpired lease term of 15 years, with five-yearly, upwards only, RPI-linked rent reviews (subject to a 4.0% cap and 1.0% floor).
Target Healthcare REIT Limited (LON:THRL, 116.0p, 111.3p, +4.2%)
Target Healthcare REIT has announced its NAV at 30 September 2021, together with an update.
Key details are:
- EPRA NTA per share up 0.8% to 111.3p (30 June 2021: 110.4p);
- NAV total return of 2.4% for the quarter;
- Raised gross proceeds of £125m in placing, with strong support from existing and new shareholders;
- Capital available (cash and undrawn debt) following the equity raise, to be supplemented by additional debt, is allocated in full to asset acquisitions totalling £215m in late-stage diligence;
- RCFs fully repaid following the equity raise prior to the period end resulting in a net LTV of 1.0% - on completion of the acquisitions in late-stage diligence and the developments currently in progress, the LTV would equal 27%;
- 0.7% increase in the like-for-like value of the operational portfolio; total property portfolio value of £702.7m and an EPRA "topped-up" NIY of 5.82%;
- 14 rent reviews completed at an average uplift of 3.3% pa, contributing a 0.6% increase to like-for-like contractual rent;
- WAULT remained stable at 28.8 years (30 June 2021: 28.8 years).
Target Healthcare REIT has announced that it has entered into a new long-term £37m committed term loan facility with Phoenix Group, an existing lending partner. The facility carries an aggregate fixed rate of interest of 3.13% pa on a ten-year term, maturing in January 2032, aligned with the Group's existing £50m facility with Phoenix. The new facility is the first part of new loan facilities for the Group, totalling £100m. Completion of the remaining £63m, which will have a longer duration, and which is in the final stages of the legal and diligence process, is expected to be aligned with the Group's acquisition of a portfolio of 18 modern care homes. The Group's total borrowing capacity now stands at £257m comprising the Facility, the existing £50m Phoenix facility and existing facilities with The Royal Bank of Scotland (£70m committed term loan and revolving credit facility repayable on 5 November 2025) and HSBC (£100m revolving credit facility repayable on 5 November 2023).
Triple Point Social Housing REIT Plc (LON:SOHO, 94.5p, 106.4p, -11.2%)
Triple Point Social Housing REIT as announced that it has completed the acquisition of a portfolio of nineteen properties and exchanged contracts on a further two properties, comprising an aggregate of 185 individual units. In addition, the Group has acquired a further five properties, comprising 38 individual units in total. The aggregate consideration paid (or, in respect of the properties yet to complete, payable) for all these properties is approximately £29.9m (excluding acquisition costs). The properties are located in Yorkshire (195 units), the West Midlands (16 units) and the North West of England (12 units). The Group has taken over the portfolio's existing FRI leases, which all have a remaining term of between 56 and 60 years (with tenant break options after 25 and 50 years) and has entered into new FRI leases in respect of each of the further three properties acquired for periods of 20 to 25 years. The leases are with housing associations regulated by the Regulator of Social Housing, including Highstone Housing Association, Inclusion Housing and Partners Foundation. The rents received under these leases are subject to annual, upward-only rent reviews, increasing in line with CPI.
Tritax EuroBox Plc (LON:EBOX, 109.0p, 105.2p, +3.6%)
Tritax EuroBox has announced that it has agreed to acquire land and fund the development of an €117.91m asset in the Rhine-Ruhr region in Germany, which is pre-let to the Rhenus Warehousing Solutions, one of the leading global logistics service providers. The property will comprise a single building with a total gross internal area of approximately 66,065sqm comprising six purpose-built logistics units. The development is expected to be completed in February 2023. This transaction is structured as a forward funding development opportunity, where the Company will buy the land initially and then fund the construction of the building under a fixed price contract. The total cost of the land and development expenditure is capped at €117.9m. From receipt of the building permit expected by February 2022 and during the 12-months construction phase, the Company will receive from the developer an income return equivalent to the agreed NIY. The entire building is pre-let on a 15-year lease to Rhenus, commencing on practical completion expected in February 2023. The lease will generate a total annual rent of approximately €4.1m.The development cost of €117.9m reflects a NIY of 3.5% based on the income from the agreed upon lease.
Tritax EuroBox has announced the acquisition of a €49.65m asset in Piacenza, Northern Italy, part of a major logistics hub. The property comprises a modern logistics warehouse arranged as two units (DC4 and DC5) constructed in 2016 and 2020 with a total gross internal area of 47,800 sqm. The units are let on two separate leases to OVS SpA, an Italian fashion brand which uses the property as its European distribution hub. The lease on DC4 is for a further eight years and on unit DC5 for nine years. Both leases are subject to annual indexation. The gross annual rent of €2.01m reflects an average of €44psqm, which is below prevailing headline rents of €47psqm.
Urban Logistics REIT Plc (LON:SHED, 173.8p, 164.3p, +5.8%)
Urban Logistics REIT has announced the acquisition of three assets for a total consideration of £29.0m at a blended NIY of 6.7%. The assets include two income producing assets providing immediate additional revenue and the forward funding of a development project. As a result it has now committed or deployed £132m of capital following its July equity raise (5.8% weighted NIY), with c. £23m of further investments in advanced stages of contractual progress. The assets are:
- Driffield - a 137,962sf facility let to Premier Modular Ltd, a leading modular building manufacturer, until 2032. It was acquired for £8,350,000 at a NIY of 6.44%;
- Spennymoor - a 239,867sf warehouse at Spennymoor, near Durham. The unit is let to Stanley Black & Decker, who have a long association with the area, and this warehouse is adjacent to their manufacturing plant. The purchase price paid was £8.7m at a NIY of 8.19%;
- Andover - 121,078sf vacant warehouse unit on the Walworth Industrial Estate near Andover. The building is situated close to major roads in an area with a very low vacancy rate and with growing rental levels. It will undergo a comprehensive redevelopment while being marketed, aiming for a NIY of 5.8%, at a total cost (including refurb costs) of £12.0.
Urban Logistics REIT has announced half year results to 30 September 2021. Key details are:
- EPRA NTA up 7.9% to 164.30p per share (31 March 2021: 152.33p);
- IFRS net assets up 37.7% to £533.6 m (31 March 2021: £387.5m);
- Dividend per share of 3.25p (H1 2020: 3.25p);
- Net rental income up 69.6% to £16.0m (H1 2020: £9.4m);
- PBT up 412.8% to £50.3m (H1 2020: £9.8m);
- Adjusted EPS up 8.5% to 3.46 p (H1 2020: 3.19p);
- Total Property Return of 11.8% (H1 2020: 8.0%);
- Total Accounting Return of 10.7% (H1 2020: 5.5%);
- £108 m of equity raised in July 2021;
- 99.7% of rents demanded collected in the period to 30 September 2021;
- Portfolio valuation up 91.0% to £660.5m (30 September 2020: £345.9 m);
- Portfolio like-for-like valuation growth of 11.3% (30 September 2020: 5.0%);
- EPRA vacancy rate of 0.6% (30 September 2020: 3.0%);
- WAULT of 7.9 years (30 September 2020: 5.5 years).
Urban Logistics REIT has announces an Initial Placing Offer for Subscription and Intermediaries Offer targeting gross proceeds of £200m at a price of 170p per share, which represents a discount of 5.56% to the last closing share price of 180p on 10 November 2021 (being the last business day prior to the announcement that the Company was in discussions with its advisors and institutions about a further equity raise) and a 4.88% premium to the adjusted unaudited EPRA NTA of 162.09p as at 30 September 2021.
UK Commercial Property REIT Limited (LON:UKCM, 75.8p, 94.5p, -19.8%)
UK Commercial Property REIT has announced its NAV at 30 September 2021. Key details are:
- 8% growth in NAV per share to 94.5p (30 June 2021: 90.2p) for the third quarter, reflecting a 9.0% increase since the start of the year;
- NAV total return of 5.5% for the third quarter and 15.1% year to date;
- LTV of 4.3%1 (gross gearing 14.0%);
- Like-for-like portfolio capital value, net of capital expenditure, increased by 4.7% to £1.3bn;
- Rent collection for the fourth quarter of 2021 (collectively the 29 September and 1 October, English, and 28 August, Scottish, quarterly billing dates) stood at 92% after allowing for agreed rent deferrals and including those tenants who have paid, by agreement, on a monthly basis;
- EPRA NTA per share is 94.5p (30 June 2021: 90.2p);
- EPRA earnings per share for the quarter increasing 3.5% to 0.59p (30 June 2021: 0.57p);
- Void rate at 2.5%;
- Quarterly dividend of 0.644p per share maintained for the third quarter.
UK Commercial Property REIT has also announced that it has exchanged on the £35m purchase of West Gate, a 98,000sf office building on Hanger Lane in West London, which is let to Kantar UK Limited for ten years, subject to a five yearly CPI-linked rent review. The asset presents a number of redevelopment options as part of the medium term business plan with a conversion to industrial being the most likely option given the property’s close proximity to Park Royal, one of Europe’s largest urban industrial areas.
UK Commercial Property REIT has announced the acquisition, via a c. £25m forward funding, of three new warehouse units, known as Sussex Junction, which are currently under construction near Gatwick airport. The asset is expected to show an attractive development yield of 5.8% pa. The development is due to complete in early summer 2022 when it will deliver approximately 107,000sf of new multi let industrial space across three units. Two of the units, covering 56% of the total, are already pre let on a 15-year lease to CGG Services, a global leader in geoscience technology, at an average rent of £13psf. Once constructed, the asset will comprise three single storey warehouse buildings, with unit one detached and units two and three forming an adjacent terrace. All units have planning for Storage and Distribution.
Warehouse REIT Plc (LON:WHR, 166.4p, 152.4p, +9.2%)
Warehouse REIT has announced half year results to 30 September 2021. Key details are:
- Revenue of £23.4m (H1 2020: £15.7m);
- Operating profit before gains on investment properties of £16.7m (H1 2020: £10.8m);
- IFRS PBT of £86.4m (H1 2020: £40.4m);
- IFRS EPS of 20.4p (H1 2020: 13.2p);
- EPRA EPS of 3.1p (H1 2020: 2.6p);
- Adjusted EPS of 3.1p (H1 2020: 2.6p);
- Dividends per share of 3.1p (H1 2020: 3.1p);
- Total cost ratio of 27.2% (H1 2020: 29.4%);
- Portfolio valuation of £907.1m (31 March 2021: £792.8m);
- IFRS NAV of £647.4m (31 March 2021: £574.1m);
- IFRS NAV per share of 152.4p (31 March 2021: 135.1p);
- EPRA NTA per share of 152.4p (31 March 2021: 135.1p);
- LTV of 26.2% (31 March 2021: 24.6%);
- 92.1% of rent due in relation to the half year collected;
- Bank debt of £263.0m and cash balances of £25.0m.
Workspace Group Plc (LON:WKP, 840.0p, 928.0p, -9.5%)
Workspace Group has announced half year results to 30 September 2021. Key details are:
- Trading profit after interest up 42.5% to £21.8m (H1 2020: £15.3m) driven by 12.3% (£4.5m) increase in net rental income;
- Property valuation of £2,271m, a decrease of 0.7% (£15m) from 31 March 2021;
- PBT of £3.4m (H1 2020: £110.4m loss);
- Interim dividend reinstated at 7.00p per share (H1 2020: Nil);
- EPRA NTA per share down 1.1% to £9.28;
- LTV of 23% (31 March 2021: 24%) with £318m of available cash and undrawn facilities;
- Like-for-like rent roll up 2.1% to £87.3m;
- Like-for-like occupancy, up 3.7% to 85.6%, with rent psf stabilising in the second quarter, up 0.3% to £35.50 after a 2.3% decline in the first quarter;
- 97% of rents due for the first half received at 9 November 2021.
Workspace has also announced that it has acquired The Busworks, in Islington, for a total of £45m, funded from existing facilities. A former Victorian bus factory, the property provides 104,000sf of net lettable space across two conjoined warehouse buildings on 1.6 acres. It is currently operated as a multi-let business centre with customers on licences. The property is 65% let and is being acquired at a net income yield of 3.4% and a capital value of £431psf.
Data sourced through the London Stock Exchange and RNS announcements.