REIT News - January 2022
Welcome to Ince Corporate Finance’s REIT News update...
REIT Market Overview
Despite the holiday period, the month of December saw a significant volume of REIT activity, particularly with regard to investments, acquisitions and financing.
LXi REIT has announced the acquisition of a long-let retail property in Middlesbrough valued at £58.9m. Target Healthcare announced the acquisition of a portfolio of 18 operational modern care homes. UK Commercial Property REIT announced the acquisition of Precision Park in Leamington Spa, Warwick for approximately £94m. Aberdeen Standard European Logistics Income announced the acquisition of a portfolio of newly constructed last-mile logistics warehouses for €227m.
Home REIT announced the close of an additional £130m interest-only debt facility with Scottish Widows. Impact Healthcare REIT announced an agreement of a £75m new long-term debt provided by two large UK insurance companies.
(Ticker, Share Price, EPRA NAV per Share, Premium/Discount)
Aberdeen Standard European Logistics Income (LON:ASLI, 117.0p, 106.1p, +10.3%)
Aberdeen Standard European Logistics Income has announced the acquisition of a portfolio of newly constructed last-mile logistics warehouses with excellent sustainability credentials, located in the first ring of Madrid, Spain, for an acquisition price of €227m. Key details are:
- The Portfolio consists of four phases with Phases I-III comprising seven newly constructed logistics warehouses and Phase IV comprising one in-development, logistics warehouse with accompanying multi-level delivery van parking station. Phases I-III were acquired on 10 December 2021 with Phase IV due for completion in Q2 2022;
- The Portfolio is let to five tenants, with Amazon Europe accounting for 43% of the total portfolio rental income. Global food retailer Carrefour, UK electric delivery vehicle maker Arrival and Spanish companies Talentum and MCR comprise the remaining Portfolio tenants. On completion of Phase IV, Amazon is expected to become ASLI's largest tenant by rental income;
- The Portfolio is located in the first ring of Madrid, in Gavilanes, one of the leading last-mile logistics hubs in Madrid;
- The Portfolio has been acquired for €227m, representing a NIY of 3.4%. All leases are upward only, annual inflation linked, with strong rental growth potential. Unexpired lease term of 14.8 years to expiry and 8.7 years to break.
Civitas Social Housing Plc (LON:CSH, 96.9p, 108.5p, -10.7%)
Civitas Social Housing has announced half-year results to 30 September 2021. Key details are:
- Annualised rent roll increased by 6.06% to £52.5m;
- Net operating cash flow increased to £19.8m;
- IFRS property valuation increased to £946.3m;
- IFRS valuation NIY of 5.27% compared to average purchase yield of 5.84% (prior to purchase costs);
- IFRS NAV per share increased to 108.49p (30 September 2020: 108.01p);
- WAULT of 22.7 years;
- Two dividends paid during period totalling 2.74p;
- In line with full year target dividend of 5.55p for the year to 31 March 2022;
- Actual run-rate dividend cover of 87.5%; reduction principally attributable to the additional finance cost of the M&G drawdown prior to investment;
- Acquisition of 29 properties for £21.9m funded from existing reserves and the drawdown of the M&G debt facility.
Custodian REIT Plc (LON:CREI, 106.0p, 106.0p, +0.0%)
Custodian REIT has announced that it has acquired a 45,779sf retail warehouse unit in Cromer occupied by Homebase, with nearby retailers including Travis Perkins, Topps Tiles, Screwfix, Halfords and Argos. The property is let on a lease expiring in July 2028 with a current passing rent of £300,000 per annum, reflecting a net initial yield of 6.29%. The agreed purchase price of £4.5m was funded from the Company's existing debt resources, resulting in net gearing increasing to 21.1% loan to value.
Ediston Property Investment Company Plc (LON:EPIC, 85.6p, 89.6p, -4.5%)
Ediston Property Investment Company as announced full year results to 30 September 2021. Key details are:
- NAV total return of 9.6% (FY 2020: -16.6%);
- Annualised dividend per share of 4.42p (2020: 4.88p);
- EPRA vacancy rate of 8.6% (30 September 2020: 5.1%);
- Ongoing charges of 1.4% (30 September 2020: 1.4%);
- Total assets of £303m (30 September 2020: £294.7m);
- WAULT of 5.0 years (30 September 2020: 5.7 years);
- EPRA NAV per share of 89.6p (30 September 2020: 86.01p).
Ground Rents Income Fund Plc (LON:GRIO, 70.0p, 103.1p, -32.1%)
Ground Rents Income Fund has announced full year results to 30 September 2021. Key details are:
- NAV of £99.7m (30 September 2020: £102.6m) or 103.1p per share (30 September 2020: 105.7p), a decline of 2.7pps;
- NAV positively impacted by the reversal of the £2m provision in connection with Beetham Tower in Manchester and the share buyback - offset by the uncovered dividend, valuation discounts relating to building safety works and general market uncertainty fuelled by regulatory headwinds;
- Portfolio valuation of £119.4m, down 3.9% compared to 30 September 2020;
- Dividends paid of £3.8m or 3.96pps, which, together with the share buyback delivered a NAV combined total return of 1.3%;
- Consolidated LTV of 16.3%;
- Resolved complex historic litigation at Beetham Tower;
- Ground rent collection remained in line with pre-pandemic collection rates at 93.8%;
- 46% of ground rent income due to be reviewed in the next five years of which 94% benefits from fixed or inflation-linked increases;
- Building remediation projects ongoing where successful Building Safety Fund applications on behalf of leaseholders should mitigate valuation discounts.
Hammerson Plc (LON:HMSO, 32.8p, 69.0p, -52.5%)
Hammerson has announced that it will commence a share repurchase programme of up to 7,691,247 shares to reduce the issued share capital of the Company to meet obligations arising from employee share option programmes.
Hammerson has announced that it has exchanged or completed sales of six non-core assets for total gross cash proceeds of £92m since the half year. Key details are:
- Sale of Silverburn, a 100,000sqm shopping centre near Glasgow, from 50/50 joint venture partners Hammerson and Canada Pension Plan Investment Board, to entities affiliated with Henderson Park and Eurofund, for £140m cash proceeds. This represents a 4% discount to 30 June 2021 book value of £147m, and a NIY of 9.3%. The transaction is expected to complete in Q1 2022, and a deposit of £40m is currently being held in escrow;
- Five other assets sold totalling £22m represent a collection of non-strategic commercial and retail assets which were sold at a premium to 30 June 2021 book values;
Together with minority stake disposals of French and UK assets (£73m) and the UK Retail Parks portfolio (£330m) sold in the first half of the year, the transactions announced take total gross proceeds from sales in 2021 to £495m.
Hibernia REIT Plc (LON:HBRN, 109.9p, 172.2p, -36.4%)
Hibernia REIT has announced that it has pre-let the majority of its 347,000sf office development at Harcourt Square, Dublin 2 to KPMG Ireland. KPMG has signed an agreement to lease 288,500sf and 76 car parking spaces on a 20-year term without break from practical completion of the development (scheduled for early 2026). KPMG will pay initial rent of €17.0m per annum from lease commencement and will receive the equivalent of 40 months’ rent free through an incentive and enhanced fit-out. A cap and collar at the first rent review after five years has been agreed. KPMG has options to lease up to a further 48,500sf on the same terms, which could take its occupancy at Harcourt Square to 337,000sf in total.
Hibernia REIT acquired Harcourt Square, which is located in the centre of Dublin a short distance from St. Stephen's Green, in 2015. The leases on the existing 122,000sf of office accommodation expire by the end of December 2022 and Hibernia received a final grant of planning permission for the redevelopment of the 1.9 acre site in 2020.
Home REIT Plc (LON:HOME, 130.0p, 104.6p, +24.3%)
Home REIT has announced that it has finalised an additional £130m interest-only debt facility with Scottish Widows. The facility has been secured on a 15-year term with a fixed all-in rate of 2.53% per annum for the duration of the facility. The margin charged is five basis points lower than that of the Company's existing £120m facility, also with Scottish Widows. When the new facility is drawn, this competitive rate will be accretive to the average net initial property yield, while mitigating potential interest rate risk for the 15-year period. The Company is targeting a maximum level of aggregate borrowings of 35% of gross assets at the time of drawdown of the relevant borrowings.
Home REIT has announced that it has deployed a further £60.2m of the proceeds raised in its oversubscribed £350m equity issue in September 2021. £289.1m of the net proceeds of the issue have now been deployed at a weighted average NIY of 5.9%. Since its announcement of 11 November 2021, the Company has acquired an additional 20 portfolios comprising 89 properties for an aggregate purchase price of £60.2m (including acquisition costs). The properties, which are located across England, provide 548 beds for those in need, bringing the portfolio total to 7,073 beds. 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 10 different specialist registered homeless charities. The leases are subject to annual upward-only rent reviews, index-linked to CPI, with an annual collar and cap of 1% and 4% respectively.
Impact Healthcare REIT Plc (LON:IHR, 119.6p, 111.8p, +7.0%)
Impact Healthcare REIT has announced that it has agreed £75m of new long-term debt provided by two large UK insurance companies. It has entered into an agreement with these institutional investors to issue £75m of senior secured notes, comprising two tranches with a weighted average coupon of 2.967%, and a weighted average maturity of 14 years.
- £37m of notes at a fixed coupon of 2.932% which were issued on 21 December 2021 and mature in December 2035;
- £38m of notes at a fixed coupon of 3.002% which will be issued on 20 June 2022 and mature in June 2035.
Following drawdown of the first tranche on 21 December 2021, £10m of the RCF with Metro Bank has been cancelled, further reducing loan facilities with Metro Bank from £40m to £30m. The remainder of the proceeds will be used to fund the Group's pipeline of investments. After the drawdown of the first tranche and repayment of Metro Bank, the Group's total available debt stands at £168m of which £104.5m is drawn, giving an LTV of c. 21% based on gross assets at 30 September 2021 plus new debt. The Group has headroom of £104m under its committed bank facilities and available cash, in addition to an uncommitted accordion facility of £24m.
Impact Healthcare REIT has announced that it has completed the acquisition of a property and exchanged contracts to acquire two further properties all with existing Group tenants. Key details are:
- Springhill Nursing care home in Kilmarnock, Scotland: a four storey Georgian building with a substantial purpose-built extension offering a total of 61 beds with en-suite wet room facilities. The Group paid a net purchase price of £3.25m with an initial annual rent of £243,000 with rent cover at acquisition of just under two times. The acquisition price reflects gross initial yield of 7.5%. Silverline, the vendor, has entered into the Group's standard lease, with a fixed term of 25 years with no break clauses and RPI uplifts of between 2% and 4% pa. Silverline has committed to a minimum annual expenditure on the maintenance of the care homes.
Portfolio of two care homes in Northern Ireland leased to Electus Healthcare: exchanged contracts, subject to re-registration with the Regulation and Quality Improvement Authority, which is expected to be procedural. Both care homes are purpose-built in established residential areas and provide a combined total of 147 en-suite bedrooms. One of the homes is located in the north-west of Belfast, the second in the coastal town of Larne. The two homes will be operated by an existing tenant, Electus, and take total care homes in Northern Ireland to five with 340 beds. The Group is to pay a net purchase price of £11.02m to the vendors. The initial annual rent has been agreed at £854,500, reflecting a gross initial yield of 7.8%. Rent cover at acquisition will be two times. Electus will enter the Group's standard leases, with a fixed term of 25-years with no break clauses. The rents receivable under the leases will be subject to annual upward-only rent reviews linked to RPI, with a floor of 2% per annum and a cap of 4% per annum. Electus has committed to a minimum annual expenditure on the maintenance of the care homes.
Industrials REIT Ltd - Formerly Stenprop - (LON:MLI, 201.0p, 158.0p, +27.2%)
Industrials REIT has announced that it has exchanged contracts for the sale of a health and leisure club for CHF 12.5m (c. £10m). The disposal, which is expected to close in the coming weeks and no later than 1 March 2022, was agreed at a 17% discount to the 31 March 2021 sterling book value. Including this sale, the Company has agreed three non-MLI disposals since the start of the financial year for c. £92m in aggregate, reflecting an overall 3.1% discount to March 2021 valuations. In a separate transaction, the Company has acquired Harmony Court in Glasgow for £5.25m, reflecting a NIY of 5.6% and a capital value of £109psf. The 48,169sf, 10-unit industrial estate is 100% let and generates a total annual passing rent of £311,051, which equates to an average rent of £6.46psf.
Industrials REIT has announced half-year results to 30 September 2021. Key details are:
- Total accounting return of 9.8% (H1 2020: 6.8%);
- IFRS EPS up 59.2% to 13.34p (H1 2020: 8.38p);
- Adjusted EPS of 3.45p (H1 2020: 3.40p);
- Diluted IFRS NAV per share up 7.4% to £1.59 (31 March 2021: £1.48);
- EPRA NTA per share up 7.5% to £1.58 (31 March 2021: £1.47);
- Portfolio valued at £574.0m (31 March 2021: £582.3m);
- Like-for-like valuation growth of 7.5%, driven largely by an 8.7% like-for-like MLI portfolio valuation increase;
- 5.0% growth in like-for-like annual passing rent (30 September 2020: 5.1%), with a 5.1% increase in like-for-like annual ERV (30 September 2020: 4.2%);
- Occupancy at 93.9%, up from 93.7% at 31 March 2021;
- Strong rent collections with over 95% of invoices billed in 2020 now paid and 2021 trending to the same level;
- Seven MLI estates acquired in the period for an aggregate purchase price of £36.5m, generating an additional £2.5m pa of rental income;
- Purchase of a further four MLI estates completed post period end for £23.3m in total, generating an additional £1.7m of annualised rental income;
- Completed the sale of two non-MLI assets in separate transactions for £82m in aggregate reflecting a 1.4% discount to March 2021 valuations.
Land Securities Group Plc (LON:LAND, 776.4p, 1,012.0p, -23.3%)
Land Securities Group has announced that it has completed the acquisition of an additional 25% share in Bluewater from Lendlease Retail Partnership for £172m representing a NIY of 8.15% and an equivalent yield of 8.25%. In a separate deal, Landsec will sell 25% of this share to co-owner M&G for its pro rata share of the purchase price with the deal completing in April 2022, at which point Landsec's ownership of Bluewater will be 48.75%. The acquisition follows the recent announcement that Landsec has created a new brand account management team alongside a new operating model for its retail business, as the Group accelerates its 'reimagine retail' strategic pillar.
Life Science REIT Plc (LON:LABS, 101.3p, 98.0p, +3.3%)
Life Science REIT has announced that it has completed the acquisition of Rolling Stock Yard, a premium, nine-storey office and laboratory building near London's St Pancras station from a joint venture of Newmark Properties, Argo Real Estate and Investec Bank. The purchase price of £77.0m, excluding acquisition costs, was satisfied entirely in cash and reflected a NIY of 4.4%. The asset, which comprises more than 50,000sf of high quality office and laboratory space, is located on York Way north of King's Cross and St Pancras stations. Occupancy of the property, which has attracted major life science companies including Gyroscope Therapeutics, is at 76%, with the Company benefiting from an 18-month rental guarantee on the remainder. The property currently generates £3,478,000 pa of contracted rent including guarantees. The property has a WAULT of seven years.
Life Science REIT has announced two acquisitions:
- Lumen House on the Harwell Science and Innovation Campus, the prestigious science park near Oxford. Lumen House was acquired on a long leasehold of more than 950 years for £7.05m satisfied entirely in cash. This represents a NIY of 4.4% after acquisition costs. The property comprises more than 18,000sf of office space, which is 100% let to a single tenant. The property currently generates a contracted rent of c. £330,000. Lease expiry is within 18 months;
- The Merrifield Centre in Cambridge was acquired for £4.8m excluding acquisition costs. The purchase price was satisfied entirely in cash and represents a NIY of 5.9%. The property comprises more than 12,000sf and is situated just to the east of Cambridge city centre in a mixed-use commercial area with strong transport links. The Merrifield Centre, which is at 100% occupancy, consists of office and laboratory space let to two tenants working in drug discovery. The property currently generates c. £290,000 pa of contracted rent, equivalent to £23psf, and has an unexpired lease term of 10 years.
Life Science REIT has announced that it completed the acquisition of three buildings at the Cambourne Business Park near Cambridge through the purchase of Scholar Property Investments, the sole assets of which are the freehold interests in the three buildings. The purchase price of £38.7m, excluding acquisition costs, was satisfied entirely in cash and reflected a NIY of 5.6%. The three buildings, which total more than 100,000sf of office and MedTech space, comprise two two-storey units and one three-storey unit and are let to tenants that include a major European MedTech company. Occupancy is currently over 83% and the property benefits from a 24-month rental guarantee on currently unoccupied space. The property currently generates c. £2.27m pa of contracted rent, including guarantees, and has a WAULT of 5.39 years.
Life Science REIT has announced that it has completed the acquisition from Coal Pension Properties Limited of the freehold to a further three buildings at Cambourne Business Park near Cambridge. The purchase price of £50.1m, excluding acquisition costs, was satisfied entirely in cash and reflected a NIY of 5.5%. This acquisition, which was under offer at the time of the Company's IPO last month, follows the £38.7m acquisition announced on 7 December 2021 of an initial three properties at Cambourne Business Park. Following this announcement, the Company's office and laboratory space at the park exceeds 230,000sf across six adjoining properties, representing 100% of the commercial property on the site. This latest acquisition comprises almost 130,000sf of high-quality office space let to a variety of occupiers. Occupancy is currently 77.48% with a rental guarantee for 18 months on unoccupied space. The property currently generates c. £2.92m of contracted rent pa, including guarantees, and has a WAULT of 5.67 years.
LondonMetric Property Plc (LON:LMP, 283.4p, 213.4p, +32.8%)
LondonMetric Property has announced that it has acquired Savills IM UK Income and Growth Fund in a corporate transaction valued at £122.2m, reflecting a blended yield on cost of 4.3% and an anticipated reversionary yield of 4.9%. The Fund owns a portfolio of 15 assets across 482,000sf with 75% in urban logistics and the remainder comprising long income assets. 74% of the assets are located in London and South East with key locations including Croydon, Farnborough, Hounslow, Greenwich, Guildford, Maidstone and Stevenage. A further 12% of the portfolio is located in the Midlands. The portfolio has a WAULT of 11.0 years (9.2 years to first break) and key occupiers include Decora, Fujitsu, Grafton, HSBC, Iveco, MKM and Volkswagen. It generates £5.35m pa of rent with 43% of the income benefitting from contractual uplifts. The assets are under-rented and offer attractive reversionary potential and further asset management opportunities.
LXI REIT Plc (LON:LXI, 145.0p, 134.0p, +8.2%)
LXi REIT has announced the acquisition of a long-let retail property in Middlesbrough, which has been valued at £58.9m. The property comprises 127,000sf, along with 850 car parking spaces and petrol filling station, on a substantial freehold site that extends to 16 acres. The Property is fully let to Sainsbury's Supermarkets with 19 years unexpired to first break. The rent increases five yearly in line with RPI inflation, collared at 1% pa and capped at 4% pa. The property includes offerings from Argos, along with The Food Warehouse, B&M, KFC and Costa, who have sub-let the space from Sainsbury's. It has online connectivity through both click-and-collect and home delivery.
The consideration for the acquisition is being satisfied by:
- The issue of shares equating to 88% of the value, at 145p per share (a 9.4% premium to the ex-dividend EPRA NTA at 30 September 2021 of 132.5p);
- A further £7.0m in cash, equating to 12% of the value.
The consideration represents a NIY of 4.9% and is expected to rise to 5.7% at the next inflation-linked rent review in 2025. The seller, an existing long-term shareholder of the Company (Laxmi Nivaria S.L.U.), has agreed to be subject to a lock-up period restricting the disposal of the shares for a minimum period of 12 months.
New River REIT Plc (LON:NRR, 88.1p, 131.0p, -32.7%)
NewRiver REIT has announced the exchange of contracts for the disposal of its Regeneration Shopping Centre in Cowley, Oxford to Redevco B.V., a leading real estate investment manager and developer, for gross proceeds of £38.8m. This reflects a 4.9% premium to the asset's latest valuation. NewRiver acquired the property for £24.6m in December 2012. In November 2021, Oxford City Council released the planning decision notice enabling 236,000sf of mixed-use regeneration. The consented scheme includes 226 new homes and major improvements to the public realm. The disposal is conditional on Oxford City Council's freeholder approval to assign the headlease, release from a previous agreement and expiry of the six-week judicial review period in relation to the planning decision notice. The judicial review period has now expired. Of the gross proceeds, £5.5m is to be held in escrow as a rental and service charge guarantee and to cover the purchaser's costs of agreeing a new headlease. NewRiver expects to recover a significant proportion of these funds. The disposal, excluding the escrow amount, reflects a NIY of 6.3%. The consideration will be satisfied in cash and the disposal is expected to complete in the first quarter of 2022. Proceeds will be used to reduce net debt and, on completion, this disposal will improve the Group's pro forma 30 September 2021 LTV of 38.0% by a further 300 bps.
NewRiver REIT and BRAVO Strategies III LLC have announced the completion of the disposal of Poole Retail Park in Dorset for £58.0m (NRR share: £5.8m). This pricing represents a NIY of 6.6% (based on assumed purchaser's costs of 1.8%), a 7.4% premium to the latest valuation and is 30% higher than when NewRiver and BRAVO acquired the asset in October 2019. Since acquisition the asset has generated an IRR of 21.6% (excluding the promote fee).
Palace Capital Plc (LON:PCA, 264.0p, 362.0p, -27.1%)
Palace Capital has announced that it has exchanged contracts to sell Fraser House, a vacant office building in Staines, Middlesex to a private company for £2m. The sale price reflects a premium to book value as at 30 September 2021 as well as the 2014 acquisition price.
Palace Capital has announced that it has completed the sale of Russell House, Walton on-Thames, Surrey for £2.625m and exchanged contracts to sell Westminster House, Gerrards Cross, Buckinghamshire for £1.9m. Both are being sold at a significant premium to book value and the latest transactions bring to £28.2m the value of properties sold under the Company's £30m disposal strategy. Russell House, which was acquired in 2014, is a multi-let office and industrial building with a floor area of 23,000sf that is being acquired by a subsidiary of Travis Perkins plc. Westminster House, which is being acquired by a private investment company, is a multi-let office and residential building, with a floor area of 3,710sf.
Primary Health Properties Plc (LON:PHP, 151.4p, 115.4p, +31.2%)
Primary Health Properties has announced that it has acquired the Parkside Medical Centre in Boston, Lincolnshire for a total consideration of £6.8m. The property is fully let to a substantial GP practice and a pharmacy. The two leases, with WAULT of 13.5 years, are accretive to the portfolio WAULT and provide for a substantial proportion of government-backed income. This acquisition will increase PHP's portfolio to a total of 520 assets, of which 20 are in Ireland, with a contracted rent roll of over £139m.
Primary Health Properties has announced that it has agreed to acquire a medical and office facility in the North East of England for £10m. The acquisition will complete when a current comprehensive refurbishment of the premises is finished, which is expected to occur in Q2 2022. The property comprises medical and office space arranged over five floors. On completion of the refurbishment, the NHS tenant will enter into a new long-term lease, with index-linked rent reviews. The acquisition will be accretive to the overall portfolio WAULT and provide 100% government backed income.
Schroder European Real Estate Investment Trust Plc (LON:SERE, 112.0p, 149.2p, -24.9%)
Schroder European Real Estate Investment Trust has announced full year results to 30 September 2021. Key details are:
- NAV of €199.5m or 149.2cps, (30 September 2020: €201.8m or 150.9cps);
- NAV total return of 3.2% based on an IFRS profit of €6.2m (30 September 2020: 16.2% / €28.4m);
- Underlying EPRA earnings of €6.6m (30 September 2020: €8.6m);
- LTV of 16% net of cash/28% gross of cash (30 September 2020: 24% net of cash/28% gross of cash) at a weighted average total interest rate of 1.4% and a weighted average loan duration of 2.9 years, with the earliest loan maturity in 2023;
- Dividend cover of 69% for the ordinary dividends (30 September 2020: 112%), with a portion of the net sale proceeds from the disposal of Paris B-B to be allocated towards covering the shortfall in income in the short term;
- Over €40m, excluding debt, of investment firepower available;
- 1.7%, or €3.5m, increase in the like-for-like portfolio value to €215.7m. Excluding the write down of the Company's sole shopping centre exposure, the portfolio value increased by €10.2m, or 5.6%;
- Two acquisitions completed totalling approx. €10m:
- a logistics investment in Nantes, France for €6.2m, reflecting a NIY of 5.5%;
- an additional floor totalling 1,050sqm in the Paris Saint-Cloud office investment in Paris.
- Concluded 11 new leases and re-gear events generating approximately €700,000 of annual contracted rent at a WAULT of four years;
- Rent collection of 93% during the period, including 95% for most recent quarter.
Standard Life Investment Property Income Trust Limited (LON:SLI, 73.7p, 93.1p, -20.8%)
Standard Life Investments Property Income Trust has announced that it has completed two purchases totalling £22.79m, financed out of existing cash reserves.
- A forward funding in St Helens, where it has acquired the site and will fund the development of an industrial unit with a total commitment of £15.05m. The premises are pre-let to St Helens Borough Council for a 15-year term with 5-yearly index-linked rent reviews generating a NIY of 4.25%. The unit will be used as a research and development facility, focussing on improving the environmental impact of glass manufacture;
- Acquisition of an existing industrial unit in Washington let to Griffith Textile Machines until September 2035. The purchase price of £7.735m reflects a NIY of 5.75%.
Supermarket Income REIT Plc (LON:SUPR, 122.0p, 108.0p, +13.0%)
Supermarket Income REIT has announced the acquisition of a Tesco supermarket in Sheffield, Yorkshire, for a purchase price of £73.2m (excluding acquisition costs), representing a NIY of 4.5%. The store was developed for Tesco in 2011 and occupies a seven acre site comprising an 88,000sf net sales area supermarket, a 12-pump petrol filling station and 640 car parking spaces. The store serves as a hub for omnichannel fulfilment in the region, operating 14 home delivery vans and click & collect functionality. The asset is being acquired with an unexpired lease term of 17 years, with annual, upwards only, RPI-linked rent reviews (subject to a 4.0% cap and 0.0% floor).
Target Healthcare REIT Limited (LON:THRL, 118.0p, 111.3p, +6.0%)
Target Healthcare has announced that it has completed the acquisition of a portfolio of 18 operational modern care homes. Combined with the previously announced acquisition of a pre-let development site in Weymouth, total investment during the quarter has been £173m including costs. These acquisitions, which formed part of the pipeline of acquisitions announced as part of the recent £125m equity fund raise, take the portfolio to 98 assets and to 32 tenants once the development site becomes operational in June 2022. The Company has also completed a £63m committed term loan facility with Phoenix Group, an existing lending partner, utilising the full £100m of new facilities that had been allocated and in diligence. The facility carries an aggregate fixed rate of interest of 3.138% per annum on a 15-year term, maturing in January 2037. Following the drawdown of the facility, which is being used to finance the acquisitions and temporarily repay a portion of the Group's revolving credit facilities, the Group will have a net LTV of 21%; a weighted average term to maturity of its debt facilities of 7.5 years; and a weighted average cost of drawn debt, inclusive of amortisation of arrangement costs, of 3.08%. The Group has undrawn flexible debt facilities of £97m, which will be used to fund portfolio commitments and the acquisition pipeline, to which the investible capital is allocated.
The PRS REIT Plc (LON:PRSR, 110.0p, 99.0p, +11.1%)
The PRS REIT has announced that, following its fundraising announced on 29 September, which raised gross proceeds of £55.6m, it has acquired three of its five targeted sites, fully committing these equity placing proceeds. The three sites have been secured at a combined gross development cost of approximately £60.3m and are expected to deliver 383 new homes with an estimated rental value of a £3.6m per annum, once built and let. All three sites are already under construction, and the first homes are due to be available for rental from the end of February 2022, as previously reported. The two remaining target sites will be funded from debt facilities, which are to be arranged, and are scheduled for acquisition during the first half of 2022.
Tritax EuroBox Plc (LON:EBOX, 117.0p, 135.0p, -13.3%)
Tritax EuroBox has announced that it has signed an agreement with institutional investors for a new private placement of €200m senior unsecured notes. The notes comprise three tranches with a weighted average coupon of 1.368%, and a weighted average maturity of nine years. The notes purchase agreement was signed on 1 December 2021 and the funds will be drawn in mid-January 2022, subject to customary closing conditions. The three tranches comprise:
- €100m at a fixed coupon of 1.216%, with 7-year maturity;
- €50m at a fixed coupon of 1.449%, with 10-year maturity;
- €50m at a fixed coupon of 1.590%, with 12-year maturity.
The proceeds will provide the Company with additional committed capital to assist in the acquisition of further potential near-term investment opportunities and will be deployed in conjunction with the €250m of new equity raised by the Company in September 2021.
Tritax EuroBox has announced full year results to 30 September 2021. Key details are:
- Portfolio value up 52.9% to €1,281.4m (30 September 2020: €837.9m);
- IFRS NAV per share up 10.1% to €1.31 (30 September 2020: €1.19);
- EPRA NTA per share up 10.7% to €1.35 (30 September 2020: €1.22);
- Total Return of 14.3% (FY 2020: 11.0%);
- PBT of €129.00m (FY 2020: €53.58m);
- Basic EPS of 19.59 cents (FY 2020: 10.60 cents);
- Adjusted EPS of 4.61 cents (FY 2020: 4.16 cents);
- EPRA Cost Ratio of 30.5% (FY 2020: 31.3%);
- LTV of 13.3% (20 September 2020: 41.1%);
- Raised gross proceeds of €480m through two oversubscribed equity issues in March and September 2021;
- Issued a €500m senior unsecured green bond in June 2021;
- WAULT of 9.3 years (including rental guarantees) (30 September 2020: 9.1 years).
Urban Logistics REIT Plc (LON:SHED, 187.0p, 164.3p, +13.8%)
Urban Logistics has announced the acquisition of four assets for a total consideration of £28.6m at a 5.82% average NIY.
- Elland Road, Leicester: A distribution depot off the M1 motorway, near Leicester. The 27,115sf site is a parcel delivery hub let to the Royal Mail Group. The purchase price paid was £3,180,000 at a NIY of 5.0%;
- Caswell Road, Northampton: A 22,783sf warehouse at in Northampton with very low site density. The unit is let to Tuffnells Parcel Express, until 2031. The purchase price paid was £5,600,000 at a NIY of 5.7%;
- Riverside Park, Dundee: A warehouse facility of 117,031sf near the airport, in Dundee. The purchase price was £6,000,000 at a NIY of 6.0%. The site is occupied by Hermes Parcelnet;
- Newhall Road, Sheffield: Entered into an agreement to forward fund the development of a new logistics unit in Sheffield. The agreement is subject to planning, and the development is expected to complete in November 2022, and will comprise a warehouse of 131,500sf. The project is targeting a 6.0% NIY on cost.
UK Commercial Property REIT Limited (LON:UKCM, 74.7p, 94.5p, -21.0%)
UK Commercial Property REIT has announced the c. £94 million acquisition of Precision Park in Leamington Spa, Warwick. Precision Park includes two distribution units extending to over 380,000sf, 65,442sf of office accommodation and development land of 3.72 acres. The distribution and office units have been refurbished, while the development site will be speculatively developed to deliver a high quality 67,700sf industrial asset with strong ESG credentials. The property is fully let.
Data sourced through the London Stock Exchange and RNS announcements.