Welcome to Ince Corporate Finance’s REIT News update...

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

Alternative Income REIT Plc (LON:AIRE, 84.0p, 93.3p, -10.0%)

Alternative Income REIT plc, the owner of a diversified portfolio of UK commercial property assets, provided a trading and business update and declares an interim dividend for the quarter ended 31 March 2022. Key details are:

• Interim quarterly dividend of 1.30 pence per share for the quarter ended 31 March 2022 (quarter ended 31 December 2021: 1.30 pence per share; quarter ended 31 March 2021: 1.25 pence per share);
• The Company remains on track to deliver on its target annual dividend of 5.5 pence per share with full dividend cover expected, all else being equal, by September 20221;
• The Adjusted EPS was 1.40 pence per share, reflecting 107.69% cash dividend cover for the quarter (quarter ended 31 December 2021: 1.37 pence per share, 105.38% cash dividend cover; year ended 30 June 2021: 5.07 pence per share, 99% cash dividend cover).
• At 31 March 2022, the Group's property portfolio had a fair value of £115.38 million across 19 properties;
• At 31 December 2021, the Group held 18 properties valued at £107.73 million. On a like-for-like basis, the fair value of those 18 properties as at 31 March 2022 was £110.13 million, representing a 2.2% increase quarter on quarter;
• At 31 March 2022, the net initial yield on the Group's portfolio was 5.72%, compared with 5.71% at 31 December 2021;
• Valuations have increased across the Group's retail warehousing, industrial and car showroom assets during the quarter driven by asset management initiatives, annual index-linked rent reviews and market demand for retail warehouses extending into the car showroom sector;
• At 31 March 2022, the Company's unaudited net asset value ("NAV") was £75.11 million, 93.30 pence per share, (31 December 2021: £72.75 million, 90.38 pence per share), representing a 3.2% increase over the period, due to increases during the quarter in portfolio valuation and income earned;
• At 31 March 2022, the Group's assets were 100% let (31 December 2021: 99.7%). This increase in occupancy is due to the letting with Bgen Ltd for an area of land at St Helens, which was vacated during Q4 2021;
• The weighted average unexpired lease term at 31 March 2022 was 17.6 years to the earlier of break and expiry (31 December 2021: 18.2 years) and 19.6 years to expiry (31 December 2021: 20.2 years);
• 93% (31 December 2021: 93%) of the portfolio's income stream is reviewed periodically on an upward only basis, in line with inflation (44% annually); with 70% and 23% of the portfolio index-linked (subject to floors and caps) to RPI and CPI, respectively. The remaining 7% of the portfolio's income stream is subject to Open Market Value Reviews;
• Contracted annualised rent increased by 9.0% this quarter to £7.22 million, reflecting the acquisition of Slough in January 2022, or 4.8% on a like-for-like basis, due to 5 rent reviews and the letting in St Helens;
• The rents for the June 2022 quarter are split 84% payable quarterly in advance and 16% payable monthly in advance;
• Rent collection remains resilient with 100% expected for the June 2022 quarter (March 2022 quarter: collected 100% of rent due; each quarter of 2021: collected 100% of rent due).

Assura Plc (LON:AGR, 71.8p, 57.2p, +25.5%)

Assura plc, the leading primary care property investor and developer, announced its results for the year ended 31 March 2022. Key details are:

• Passing rent roll increased 12% to £135.7 million (2021: £121.7 million) with WAULT maintained at 11.8 years;
• Profit before tax grew 44% to £155.8 million (2021: £108.3 million) with EPS up 37% at 5.6p (2021: 4.1p);
• EPRA earnings up 14% to £86.2 million (2021: £75.4 million) and EPRA EPS of 3.1p (2021: 2.8p1);
• Portfolio value rose 12% to £2,752 million (2021: £2,453 million) and Net Initial Yield ("NIY") at 4.48% (2021: 4.58%);
• Growing portfolio of 645 high-quality properties (2021: 609) serving 6.8 million people across the UK;
• Added 47 properties at a cost of £271 million (yield on cost 4.6%, WAULT 19 years) and completed four asset enhancement capital projects (£2.7 million);
• Total development pipeline of £522 million with a further 23 asset enhancement projects (£18 million);
• 11 properties sold for above book value proceeds of £15 million; £76m of assets held for sale;
• Lease re-gears completed on £1.3 million existing rent roll with further £6.9 million in the pipeline;
• Rent reviews generated weighted average annual rent increase of 1.9%3 (absolute increase of 5.1% on rent roll reviewed);
• Acquisition pipeline of 20 properties at cost of £119 million;
• Total contracted rental income increased 15% to £1.81 billion (2021: £1.57 billion);
• Further progress on its SixBySix social impact and sustainability strategy;
• Net Zero Carbon Development Design Guide launched and being rolled out into development pipeline;
• LTV of 36%, net debt of £1,006 million on a fully unsecured basis;
• All drawn debt on fixed rate basis - weighted average interest rate reduced to 2.30% (2021: 2.47%) with weighted average debt maturity unchanged at 8 years;
• Issued 12-year £300 million Sustainability Bond with coupon of 1.625%;
• Cash and undrawn facilities of £369 million;
• A- (stable outlook) rating from Fitch Ratings Ltd reaffirmed in January 2022.

Big Yellow Group Plc (LON:BYG, 1,347.0p, 1,034.6p, +30.2%)

Big Yellow announced that it has conditionally sold its industrial warehouse scheme at Harrow, London for gross sales proceeds of £61 million. Completion of the sale is conditional, inter alia, on practical completion of the development, and is expected to occur in August of this year. The Company has deployed approximately £27 million of capital expenditure to date with a cost to complete of approximately £4.5 million, totalling approximately £31.5 million including the cost of the land.

British Land Plc (LON:BLND, 525.6p, 727.0p, -27.7%)

British Land announce full-year results. Key details are:

• £2.2bn capital activity - actively recycling capital into areas of growth and value;
• £694m from the sale of 75% of majority of assets at Paddington Central to GIC post year end, crystallising 9% p.a. total property returns;
• £290m from the sale of 50% of its share in the Canada Water Masterplan to AustralianSuper, enabling to accelerate delivery and returns from the scheme;
• On site with 1.7m sqft of net zero carbon developments across its Campuses; 91% of costs fixed;
• £102m of acquisitions in Cambridge and Guildford, building exposure to innovation sectors; on site with first lab enabled scheme;
• £350m investment into Retail Parks in the year with a further £49m in FY21, exploiting the value opportunity;
• Assembled an urban logistics development pipeline with a gross development value of £1.3bn, focused on London where the supply-demand imbalance is most acute;
• Portfolio value up 6.8% with Campuses up 5.4% and Retail & Fulfilment up 9.9% driven by Retail Parks up 20.7%;
• 42bps yield contraction overall; 11 bps yield contraction in Campuses; 151bps yield contraction in Retail Parks;
• 1.7m sqft of Campus leasing, highest volume in 10 years; 5.4% ahead of ERV; average lease length over 12 years;
• 2.2m sqft Retail & Fulfilment leasing, highest volume in 10 years, 2.8% ahead of ERV; Retail Park vacancy down to 2.6%;
• Footfall and sales on its Retail Parks portfolio 99.5% and 100.2% of FY20 respectively;
• Strong rent collection: 97% for the year, nearing pre-pandemic levels, significantly reducing provisions;
• 14.8% Total Accounting Return;
• EPRA Net Tangible Assets (NTA) up 12.2% to 727p;
• FY22 dividend of 21.92p per share;
• Delivered its second net zero carbon development at 1 Triton Square, fully let to Meta (previously Facebook);
• First UK REIT to achieve the Disability Smart Standard accreditation from the Business Disability Forum.

Capital & Regional Plc (LON:CAL, 60.6p, 102.0p, -40.6%)

Capital & Regional, the UK convenience and community-focused shopping centre REIT, provided an update on trading and developments within its property portfolio. Key details are:

• In the four months to the end of April 2022 footfall was 193.3% of the equivalent period for 2021. In total there were 18.4 million shopper visits, equating to approximately 76% of the footfall for the equivalent period in 2019;
• In the year to date, completed 34 new lettings and renewals for a combined value of £1.8 million in aggregate, ahead of previous rent and ERV;
• Signed an agreement for lease with the NHS for a new community healthcare centre at Ilford on a 25-year lease term. This will be a flagship project providing a new 20,000 sqft purpose-built facility that is expected to open to the public in 2024;
• Occupancy has remained stable at 93% at the end of April 2022;
• Of the quarterly rent due on 25 March 2022, the Company has so far received 93% and has received 96% of the rent due in respect of the first quarter of the year.

Capital & Regional has exchanged contracts for the sale of The Mall, Blackburn to the retail arm of the Adhan Group of Companies for £40 million in cash.  This represents a premium to the December 2021 valuation of £38.2 million. Completion of the sale, which is subject to local authority freeholder consent, is expected to take place around the end of June 2022.

Civitas Social Housing Plc (LON:CSH, 83.4p, 110.3p, -24.4%)

Civitas Social Housing plc, the UK's leading care-based and healthcare REIT, announced its quarterly net asset value update as at 31 March 2022, with performance continuing to be robust and dividend declared in line with full year target. Key details are:

• Consistently robust financial and operational performance, in line with the Board's expectations;
• Unaudited IFRS NAV per share continues to be resilient at 110.30p (31 March 2021: 108.30p);
• New dividend target of at least 5.70p for financial year ending 31 March 2023 (2.7% increase);
• Acquisition of 47 properties in the quarter for c. £8.1m to deliver asylum accommodation.

Custodian REIT Plc (LON:CREI, 99.5p, 119.7p, -16.9%)

Custodian REIT, the UK commercial real estate investment company focused on smaller lot-sizes, reported its unaudited net asset value as at 31 March 2022 and highlights for the period from 1 January 2022 to 31 March 2022. Key details are:

• The Company’s £0.7bn portfolio comprises 160 smaller lot-sized regional commercial properties diversified by sector, tenant, location and lease length and offers investors a prospective 5.5% income return with the potential for capital growth;
• The portfolio is conservatively geared with a target 25% loan-to-value paying aggregate interest of below 3% on its majority fixed-rate debt facilities;
• Dividend per share approved for the Period of 1.375p;
• Aggregate dividends per share declared relating to the year ended 31 March 2022 (“FY22”) of 5.25p (2021: 5.0p);
• Target dividends per share of no less than 5.5p for the year ending 31 March 2023;
• EPRA earnings per share (“EPS”) for the Period of 1.6p and for FY22 increasing to 5.9p (2021: 5.6p) primarily due to a £0.3m decrease in the doubtful debt provision during the year (2021: £2.7m increase);
• EPRA EPS 110%3 covered the FY22 dividend (2021: 113%);
• The accretive acquisition of DRUM Income Plus REIT plc (“DRUM”) in November 2021 has delivered an annualised 11p of EPRA earnings per new share issued in consideration since acquisition, with DRUM’s portfolio valuation remaining steady at £49m;
• NAV per share of 119.7p (31 December 2021: 113.7p, 31 March 2021: 97.6p);
• NAV of £527.6m (31 December 2021: £501.4m);
• Property portfolio value of £665.2m (31 December 2021: £637.9m);
• £25.5m aggregate valuation increase for the Period;
• Net gearing decreased to 19.1% loan-to-value (31 March 2021: 24.9%) due to valuation increases of £94.0m over the last 12 months;
• EPRA occupancy decreased to 89.9% (31 March 2021: 91.6%);
• Since the Period-end, £7.5m invested in an industrial facility in Grangemouth.

Custodian REIT acquired two retail units on Winchester High Street covering an aggregate 5,228 sqft let to Nationwide Building Society and Hobbs. Nearby occupiers include Marks & Spencer, Boots, Halifax Bank and Superdrug. The tenants’ leases expire in April 2028 and December 2031 respectively at an aggregate current passing rent of £249,200 per annum, reflecting a net initial yield of 6.41%. The agreed purchase price of £3.65 million was funded from the Company’s existing debt facilities, resulting in net gearing increasing to 20.5% loan to value.

Derwent London (LON:DLN, 2,974.0p, 3,959.0p, -24.9%)

Derwent London announced a portfolio update. Key highlights are:

• £3.9m of new leases achieved YTD, 8.2% above December 2021 ERV;
• 3.1% EPRA vacancy rate at Q1 2022 (FY2021: 1.6%), with current vacancy at 6.4%, in line with expectations;
• Completed the purchase of 230 Blackfriars Road SE1 for £58.3m, currently yielding £2.1m pa
• Major developments on track - delivering net zero carbon schemes:
• 1 Soho Place W1 achieved practical completion in February. Occupier fit-out of the fully pre-let offices has commenced. The adjacent 2 & 4 Soho Place W1 is expected to complete in Q2 2022;
• Commitment to Network Building W1 (137,000 sqft of offices). Start on site June 2022.
• LTV 23.2%1 at Q1 2022;
• Cash and undrawn facilities of £441m at Q1 2022.

Derwent also announced that it has exchanged a conditional contract to acquire the freehold of City Road Island EC1, the site of the Moorfields Eye Hospital and the UCL Institute of Ophthalmology. The site is being sold by Moorfields Eye Hospital NHS Foundation Trust and UCL for £239m before costs.

Ediston Property Investment Company Plc (LON:EPIC, 80.2p, 96.1p, -16.5%)

Ediston Property Investment Company announced its half-year results for the six months ended 31 March 2022. Key details are:

• Property portfolio increased in value, on a like-for like basis by 11.2%;
• Net asset value increased 7.1% to 96.1 pence (30 September 2021: 89.7 pence);
• Share price increased by 6.7% to 78.8 pence, narrowing the discount to 13.1% at the period end;
• Completed the first phase of the Company's revised investment strategy by selling the office portfolio, realising net proceeds of £60.0 million;
• Completed 12 lease transactions across office, leisure and retail warehouse properties;
• 98.2% of the rent due was collected for the period;
• Various pipeline projects, including investment opportunities and asset management initiatives being considered.

Empiric Student Property Plc (LON:ESP, 93.3p, 107.4p, -13.1%)

Empiric Student Property plc, the owner and operator of premium student accommodation serving key UK universities, announced a trading update for the period from 1 January to 20 May 2022. Key details are:

• Revenue management and dynamic pricing platform is helping to maximise rents and bookings for the academic year 2022/23 ("AY22/23"). So far, this has helped to improve rental prices in fast selling locations;
• With bookings at 68% to date, it is currently too early to give firm like for like rental guidance. However, current trends indicate a return to pre-pandemic levels of rental growth;
• In the first quarter of 2022, sold five sites for £26.5 million. Since the disposal programme began, the Company has sold nine sites for £44.6 million, above book value;
• Progress with its two-year programme of non-core property disposals, with £80 million remaining. Expected to complete further sales transactions in the second half of the year, at or above book value in aggregate;
• The cash generated allowed to recycle capital and acquire the high-quality 92-bed asset, Market Quarter in Bristol city centre, for £19 million in February 2022, reflecting 4.75% net initial yield. Within weeks of acquiring the property, it was 100% booked for AY22/23 with an 18% increase in rent.

Great Portland Estates Plc (LON:GPE, 656.0p, 835.0p, -21.4%)

GPE announced the off-market acquisition of the long leasehold interest at 6/10 St Andrew Street for £30 million (£650 per sqft). The 46,200-sqft building is currently vacant, and benefits from planning permission for a two-storey extension. The building is located within five minutes walking distance of Chancery Lane and Farringdon stations and is only 450 metres from the new Farringdon Elizabeth Line. It has excellent fundamentals and requires substantial refurbishment to bring it in line with GPE's net zero carbon commitment. It will provide approximately 48,000 sqft over lower ground and eight upper floors, with two private terraces as well as a communal roof terrace and winter garden.

Great Portland Estates announced annual results. Key details are:

• Portfolio valuation, up 6.1%2 (+7.9% offices, retail flat); developments up 49%; rental values up 3.0%;
• Total property return of 9.4%, with capital return of 6.5% v MSCI Central London (annual index) of 3.8%;
• Robust financial results; solid NTA growth +7.2% and TAR +8.8%;
• IFRS NAV and EPRA NTA per share of 835 pence, up 7.2% over twelve months;
• EPRA earnings of £27.4 million, down 31.7% on 2021 as expected; EPRA3 EPS of 10.8 pence, down 31.6%;
• After revaluation surplus, IFRS profit after tax of £167.2 million (2021: loss of £201.9 million);
• Total accounting return of 8.8% over twelve months; dividend per share maintained at 12.6 pence;
• £38.5 million of new annual rent across 520,900 sqft, market lettings 9.8% above March 2021 ERV;
• Central London retail recovery, 22 deals signed in the year, 203,700 sqft, 12.3% above ERV;
• £9.4 million lettings under offer, 2.5% ahead of March 2022 ERV, further c. £32 million in negotiation;
• Vacancy down to 10.8%, 4.4% excl. completed developments (Mar 2021: 6.6%).

Helical Plc (LON:HLCL, 428.0p, 572.0p, -25.2%)

Helical reported final results. Key details include:

• Major boost to the development pipeline with the acquisition of 100 New Bridge Street, EC4. Delivery of a c.185,000 sqft office scheme planned for early 2025;
• 14 residential units at Barts Square sold in this 236 unit residential scheme, leaving 14 apartments available at the year-end of which one has since been sold and two are under offer;
• 12 new lettings completed across the portfolio, totalling 54,118 sqft, delivering contracted rent of £3.3m (Helical's share £3.0m) at 1.8% above the 31 March 2021 ERV (excluding managed lettings);
• 95.8% of all rent contracted and payable for the financial year collected with 2.2% to be collected following the end of the Government's general moratorium and 2.0% having been written off or agreed concessions;
• Post year end disposals of:
  • Trinity, last remaining asset in Manchester, for £34.55m, at a net premium of c.£2.0m to 31 March 2022 book value and representing a net initial yield of 5.0%.
  • 55 Bartholomew, EC1, for £16.5m (Helical’s share £7.6m), at a 3% premium to 31 March 2022 book value, reflecting a net initial yield of 4.5%.

• IFRS profit after tax increased to £88.9m (2021: £17.9m);
• IFRS basic earnings per share of 72.8p (2021: 14.8p);
• EPRA earnings per share of 5.2p (2021: loss of 1.8p);
• Final dividend proposed of 8.25p per share (2021: 7.40p), an increase of 11.5%;
• Total dividend for the year of 11.15p (2021: 10.10p), an increase of 10.4%;
• Net asset value up 13.0% to £687.0m (31 March 2021: £608.2m);
• EPRA net tangible asset value per share up 7.3% to 572p (31 March 2021: 533p);
• EPRA net disposal value per share up 13.6% to 551p (31 March 2021: 485p);
• Average maturity of the Group's share of secured debt of 3.0 years (31 March 2021: 3.2 years), increasing to 3.7 years on exercise of options to extend current facilities and on a fully utilised basis;
• Group's share of cash and undrawn bank facilities of £132m (31 March 2021: £423m);
• IFRS investment property portfolio value of £938.8m (31 March 2021: £740.2m);
• 7.0% valuation increase, on a like-for-like basis (5.6% including sales and purchases), of its see-through investment portfolio, valued at £1,097.3m, compared to £839.4m at 31 March 2021;
• Contracted rents of £46.4m (31 March 2021: £37.8m) compared to an ERV1 of £67.1m (31 March 2021: £52.1m);
• Vacancy rate reduced from 10.5% to 6.7%;
• 96% of the space has been recently developed or refurbished (excluding 100 New Bridge Street, EC4) with 99% of the investment portfolio, by value, having an A or B EPC rating.

Home REIT (LON:HOME, 114.2p, 111.2p, +2.7%)

Home REIT plc, which funds the acquisition and creation of high-quality properties across the UK that are dedicated to providing accommodation to homeless people, announced that it has acquired 156 additional properties (the "Properties") for an aggregate purchase price of £42.4 million (including acquisition costs). Following the latest tranche of investments, since inception the Company has deployed a total of £0.7 billion at a weighted average net initial yield of 5.86 per cent, ahead of the Company's initial forecast and in-line with the Company's strict investment criteria. On 25 January 2022, the Company announced that the net proceeds of its significantly oversubscribed £350 million equity issue in September 2021 had been fully deployed.

Home REIT announced the launch of a Subsequent Placing of new Ordinary Shares targeting a raise of approximately £150 million at a price of 115 pence per Ordinary Share (the "Placing Price") pursuant to the terms of its existing Placing Programme:

• The Placing Price of 115 pence per Ordinary Share represents a 4.7% premium to the 28 February 2022 NAV of 111.2 pence per Ordinary Share, adjusted downwards for the interim dividend of 1.37 pence per Ordinary Share announced on 5 May 2022;
• Net proceeds will be used to acquire further homes in line with the Company's strict investment criteria and as successfully demonstrated over the past 18 months;
• Advanced legal negotiations are underway on a c. £300 million pipeline of such investment opportunities, with an average net acquisition yield of 5.84%.  

Home REIT announced that it has raised gross proceeds of approximately £263 million through a significantly oversubscribed Subsequent Placing of 228,899,083 New Ordinary Shares at an issue price of 115 pence per New Ordinary Share. Given the strong level and quality of demand from investors in the capital raise, the Board determined to increase the size of the Subsequent Placing from the target of approximately £150 million to £263 million. Notwithstanding this increase, investor demand exceeded the maximum size of the Subsequent Placing and a scaling back exercise was undertaken. Following this Subsequent Placing, the Company has issued all the Ordinary Shares covered in its Placing Programme. Home REIT aims to deploy the net proceeds of the Subsequent Placing into the Company's c. £300 million acquisition pipeline, representing hundreds of new homes for some of the most vulnerable members of society.

Impact Healthcare REIT (LON:IHR, 119.0p, 114.9p, +3.5%)

Impact Healthcare REIT, the real estate investment trust that gives investors exposure to a diversified portfolio of UK healthcare real estate assets, announced the accretive acquisition of three properties with an existing Group tenant, Welford Healthcare, for £25.0 million, plus transaction costs. The portfolio includes a 61-bedroom specialist dementia nursing home in Devon, which was purpose-built in 2011, and benefits from 100% en-suite wet rooms, and two part-converted and extended nursing and residential homes in Devon and Somerset registered for 54 and 69 elderly clients, respectively. All three properties are well located with long-standing exceptional local reputations for providing high-quality care within the local community. The homes have CQC ratings ranging between Good and Outstanding and benefit from favourable underlying demographics in the local catchment areas with attractive demand/supply fundamentals.

Landsec Plc (LON:LAND, 776.8p, 1,063.0p, -26.9%)

Landsec has announced that it has entered into a sale and purchase agreement relating to the sale of 32-50 Strand, London, WC2 for £195m to Sinarmas Land Limited, a real estate company listed on the Singapore Exchange and headquartered in Singapore. The transaction is expected to be completed later in June 2022. The disposal is in line with Landsec's strategy to accelerate growth through recycling capital into higher return opportunities.

Land Securities Group announced full-year results. Key details are:

• Total accounting return up to 10.5%, driven by strong operational performance and strategic actions;
• EPRA EPS up 42% to 48.0p, reflecting growth in LFL income and normalising trading conditions;
• EPRA NTA per share up 8% to 1,063p, with a portfolio valuation surplus of 3.6%;
• Profit before tax up to £875m (2021: £1,393m loss), driven by growth in earnings and values;
• Total dividend up 37.0% to 37.0p per share (2021: 27.0p), supported by strong recovery in earnings;
• Group LTV up slightly to 34.4% (2021: 32.2%), due to investment in future growth opportunities;
• Weighted average maturity of debt at 9.1 years (2021: 11.5 years), providing strong financial base;
• Strong London office leasing, positive operational performance and valuation growth in retail and marked growth in mixed-use urban pipeline, underpinned by successful capital recycling and strong balance sheet.

Life Science REIT Plc (LON:LABS, 100.1p, 100.2p, -0.1%)

Life Science REIT, the real estate investment trust focused on UK life science properties, announced that it completed the acquisition of 7-11 Herbrand Street, an iconic Art Deco building close to University College Hospital and University College London in London's Knowledge Quarter. The purchase price of £85.0 million, excluding acquisition costs, was satisfied entirely in cash and reflects a net initial yield of 4.42%. The entire building is currently let to Thought Machine, one of the UK's leading fintech companies, until October 2026.

Life Science REIT announced the acquisition of Oxford Technology Park, a 20-acre science and technology park that, once fully developed, will comprise up to 450,000 sqft of mixed-use life science space and amenity assets. The first buildings on the park are already complete and delivering rental income.

Life Science REIT, the real estate investment trust focused on UK life science properties, announced its audited preliminary results for the period ended 31 December 2021. Key details are:

• Five high quality acquisitions in Oxford, Cambridge and London completed before the period end;
• Portfolio valued at £192.2 million at 31 December 2021, including a revaluation gain of £14.5 million;
• Net asset value of £350.6 million or 100.2 pence per share at the period end, 31 December 2021;
• All of the Group's IPO proceeds successfully deployed following two further transactions in the current year, further diversifying the Group's portfolio;
• In March 2022, the Group entered into a debt financing facility (the "Debt Facility") of £150 million with HSBC UK Bank plc, comprising a £75 million three year term loan facility and an equally sized revolving credit facility. The first drawdown of £64 million was made in May 2022;
• The Company intends to declare its first dividend later this year for the period from admission to AIM to 30 June 2022 and thereafter adopt a progressive dividend policy, with dividends paid semi-annually.

LondonMetric Plc (LON:LMP, 256.0p, 261.1p, -2.0%)

LondonMetric Property plc has sold four assets, in separate transactions, for £34.2 million, reflecting a blended NIY of 4.1%. The combined sale price is 35% above LondonMetric's 30 September 2021 book value, representing 125bps of yield compression. The assets comprise:

• a 32,000 sqft grocery store in Ashford, Middlesex, which has been sold by Metric Income Plus Limited Partnership, LondonMetric's joint venture with Universities Superannuation Scheme Ltd;
• a significantly refurbished 34,000 sqft NNN Retail asset in Cardiff recently re-let to Sofology and Tapi with a WAULT of 8 years;
• a pub in Greenwich let to Spirit Group for a further 22 years that was previously acquired as part of   the Savills IM portfolio acquisition in December 2021;
• a petrol filling station and convenience store in Rushden let to Euro Garages with a WAULT of 30 years.

The properties generate a rent of £1.5 million p.a. (LondonMetric share: £1.2 million) and have a WAULT of 18 years. The sales crystallise a blended ungeared IRR of 25%.

LondonMetric Property plc announced that it has exchanged on the sale of its distribution warehouse in Reading to EQT Exeter for £60.6 million. The 229,000-sqft warehouse is let to DHL. LondonMetric acquired the property in 2015 with ten years on the lease for £29.1 million, reflecting a NIY of 5.7%. Since acquisition, LondonMetric settled the 2020 open market rent review at 28% above previous passing. The sale is 20% above the 30 September 2021 book value and will crystallise an ungeared IRR of 15%.

LondonMetric Property plc acquired a portfolio comprising two NNN retail assets for £23.3 million, reflecting a blended NIY of 6.7%. The properties generate a rent of £1.6 million p.a., which equates to £13.90 psf. They have a WAULT of six years and comprise:

• a 76,000-sqft property in Evesham, which is predominantly let to The Range and Halfords with other occupiers including Costa, Greggs and Pets at Home;
• a 42,000-sqft property in Burton-upon-Trent, which is let to Dunelm, Halfords and Pets at Home.

LondonMetric also announced its full year results for the year ended 31 March 2022. Key details are:

• Portfolio value grown to £3.6bn (2021: £2.6bn);
• Capital return of 22.9% (IPD All Property: 14.9%), logistics delivered 26.5%;
• ERV growth of 10% and yield compression of 61bps;
• EPRA NTA per share increased by 37.2% to 261.1p, driven by 67.9p valuation gain;
• Net rental income up 7.9% to £133.1m, on an IFRS basis increased by 8.6%;
• EPRA cost ratio down 110 bps to 12.5%;
• EPRA earnings up 9.2% to £93.5m, +5.5% on a per share basis;
• IFRS reported profit up 185% to £734.5m;
• Dividend progression of 6.9% to 9.25p, 109% covered, including Q4 dividend declared of 2.65p;
• Continued progression expected with Q1 23 dividend guidance of 2.3p, a 4.5% progression on Q1 22;
• £575m of acquisitions with a WAULT of 15 years and 64% of rent subject to contractual uplifts;
• £208m of disposals, largely located in the Midlands and the North, with a WAULT of 10 years;
• Post year end acquisitions of £43m with a WAULT of 13 years;
• Post year end disposals of £86m with a WAULT of 8 years and at a 14% premium to March 22 book value;
• Rent reviews +13% with urban open market reviews +22%;
• Lettings signed with WAULT of 16 years;
• Occupancy remains high at 98.7%, WAULT of 11.9 years and gross to net income ratio of 98.8%;
• Contractual rental uplifts on 61% of income with embedded reversion on urban logistics portfolio;
• LTV of 28.8% with weighted average debt maturity of 6.5 years and cost of debt at 2.6%;
• £175m equity placing, £780m of debt refinancing and further £150 million of new debt facilities during year.

Picton Property Income Ltd (LON:PCTN, 98.5p, 120.0p, -17.9%)

Picton has completed the freehold acquisition of Charlotte Terrace, Hammersmith Road, W14 for £13.7 million. Charlotte Terrace comprises four adjoining buildings, which total 28,500 sqft of office space and 4,400 sqft of retail space, arranged over five floors. The property was redeveloped behind the façade in 1990 and is Grade II listed, meaning there is no business rates payable on void units. The property is located close to Olympia, which is currently undergoing a £1 billion redevelopment delivering a new creative district, with a new theatre, entertainment venue, hotel, office, retail and leisure space, which will enhance the surrounding area.

The current annual rental income is £0.5 million equating to £34 per sqft. The office space is let to seven occupiers and the retail space is let to two occupiers. This is expected to rise to over £1.1 million once the remaining units are leased. To improve occupancy, Picton will upgrade the offices and rollout SwiftSpace, its recently launched flexible lease offering.

The purchase price reflects a net initial yield of 3.3%, rising to over 8% once fully let and reflecting a low capital value of £417 per sqft, which is below its estimated replacement cost. The Company has funded the acquisition from existing cash resources.

Picton announced its annual results for the year ending 31 March 2022. Key details are:

• Profit after tax of £147 million, the highest profit recorded since launch in 2005 (2021: £34 million);
• Net assets of £657 million, or 120p per share, an increase of 24.4% (2021: £528 million or 97p per share);
• Earnings per share of 27.0p (2021: 6.2p);
• Total return of 28.3% (2021: 6.6%);
• Increased dividends paid of £18.4 million with dividend cover of 115%;
• Loan to value ratio maintained at 21% with significant headroom against loan covenants;
• Refinanced existing debt facility increasing borrowings by £49 million while reducing the cost of debt and extending the term;
• Significant valuation gains with like-for-like valuation increase of 21%;
• Well positioned portfolio comprising Industrial 60%, Office 30%, Retail and Leisure 10%;
• Like-for-like increase in passing rent of 2.1%;
• Like-for-like estimated rental value increase of 5.4%;
• Selective investment activity:
  • Two industrial assets acquired for £25.0 million;
  •  One retail asset disposal for £0.7 million, 16% ahead of March 2021 valuation.

• Rent collection back to pre-pandemic levels;
• Increased occupancy to 93% (2021: 91%);
• 76 asset management transactions completed including:
  • 34 lettings or agreements to lease, 8% ahead of ERV;
  • 21 lease renewals or regears, 3% ahead of ERV;
  • 12 rent reviews, 7% ahead of ERV;
  •  9 other asset management transactions.

• £10 million invested into asset refurbishment, upgrades and repositioning projects;
• Improved EPC ratings with 71% rated A-C (2021: 64% rated A-C).

Regional REIT Ltd (LON:RGL, 83.1p, 97.2p, -14.6%)

Regional REIT Limited, the regional office specialist, announced the acquisition of three separate office investments in Derby, Milton Keynes and Crawley for £19.8m, £15.9m, and £12.5m respectively, reflecting net initial yields of 8.6%, 8.9% and 8.4%, with an overall blended net initial yield of 8.7%:

• Orbis 1-3, Derby (totalling 122,153 sqft), are situated on a 7.54 acre site on the prime Pride Park business park. The offices are currently 100% let to the DHU Healthcare C.I.C., which provides partner services to the NHS, Firstsource Solutions UK Ltd., and Tentamus Pharma (UK), a specialist pharmaceutical company, with a contracted rent of £1.8m per annum (£14.93 psf.);
• Linford Wood Business, Milton Keynes, (totalling 115,315 sqft) is set in 8.4 acres, in close proximity to Central Milton Keynes, with extensive parking. Milton Keynes is in the 'UK Growth Corridor' between Oxford and Cambridge, the UK Government's vision for maximising population growth, business expansion and economic output. It comprises one single-let and four multi-let office buildings and are let to a range of high quality tenants, including Kantar Consulting and IM Serve Europe, producing an income of £1.5m pa (£14.53 psf.);
• Origin 1 & 2, Crawley (totalling 45,855 sqft) comprises two office buildings, which are situated on a 1.9-acre corner site on Crawley High Street. The three and four storey offices being fully let generate in aggregate a rent of £1.1m pa (£24.34 psf) from high quality tenants.

In addition, since the 31 March 2022 a number of smaller vacant and non-core assets have been sold for £35.1m at a net initial yield of 6.6%, and broadly in line with their 31 December 2021 book value, taking the overall disposals this year to £68.6m.

Regional REIT issued a trading update. Key details are:

• 160 properties, 1,438 units and 1,035 tenants, totalling c. £874.0m of gross property assets, with a gross rent roll of c. £68.5m pa;
• Offices (by value) were 91.4% of the portfolio (31 December 2021: 89.8%), industrial sites 3.8% (31 December 2021: 5.1%), retail 3.4% (31 December 2021: 3.7%), and Other 1.4% (31 December 2021: 1.4%);
• England & Wales represented 82.7% (31 December 2021: 81.0%) of the portfolio with the remainder in Scotland;
• EPRA Occupancy (by ERV) 81.6% (31 December 2021: 81.8%); 31 March 2022 like-for-like (versus 31 March 2021) 82.1% (88.4%); including subsequent transactional activity EPRA Occupancy stands at 82.7%;
• Average lot size c. £5.5m (31 December 2021: £5.4m);
• Capital expenditure £0.7m (31 December 2021 £6.8m);
• Net loan-to-value ratio c. 40.3%1 (31 December 2021: 42.4%). Gross borrowings £434.1m (31 December 2021: £439.9m), cash and cash equivalent balances £82.3m (31 December 2021: £56.1m). Cost of debt (including hedging) of 3.4% pa (31 December 2021: 3.3% pa);
• Rent collection for Q1 2022 invoicing amounted to 97.1%, which comprised of 95.2% rent received, monthly rents of 1.3% and agreed collection plans of 0.6%. This compared favourably with the collection of 93.3% for the equivalent period in 2021;
• Overall, Regional REIT is strongly positioned as it continues to deliver on its investment strategy of providing a de-risked office portfolio, which in-turn will drive shareholder income and value over the long-term;
• The Group completed a number of lease renewals during the quarter, achieving rental uplifts of 13.6% versus previous rent and an uplift of 11.7% against ERV. Of the 44 leases that came up for renewal in Q1 2022, 31 units remain let (70.5%);
• Since 1 January 2022, the Group has exchanged on 20 new leases, totalling 136,206 sqft. When fully occupied these new leases will provide £1.0m per annum ("pa") of rental income;
• Total disposals in the three months to 31 March 2022 amounted to £33.5m, reflecting an uplift of 1.3% premium to the 31 December 2021 valuation;
• Since 31 March 2022, five properties have been sold for £35.7m, reflecting a net initial yield of 6.7% and broadly in line with 31 December 2021 book value, taking the overall disposals this year to £69.2m (before costs);
• As announced on the 18 May 2022, the Company has acquired three offices investments for £48.2m, reflecting a NIY of 8.7%.

The Group undertook several asset management projects, generating new lettings and maintaining and improving income through lease renewals and re-gears:

• 300 Bath Street, Glasgow - The Firm of Fairhurst Consulting Structural and Civil Engineers has leased 10,262 sqft for ten years with the option to break in 2027 at a rent of £209,652 pa (£20.43/ sq. ft.);
• 2800 The Crescent, Solihull, Birmingham - The remaining available space was let to Align Technology UK Ltd. (8,401 sqft) at a rent of £193,223 pa (£23.00/sqft) from March 2022 until February 2029, with the option to break in 2024;
• Hudson House, Derby - Mobile Gaming Studios Ltd. has let the remaining available space of 11,000 sqft at a rent of £184,161 pa (£16.74/ sqft). The lease is for ten years with the option to break in 2029;
• 31 Foleshill Road, Coventry - Halfords Ltd. renewed its lease for a further five years, to June 2027, at a rental income of £165,484 pa (£11.12/ sqft) on 14,888 sqft of space;
• Building 2, Bear Brook Office Park, Aylesbury - 5,550 sqft of space has been let to International Fire Consultants Ltd. at a rent of £94,350 pa (£17.00/ sqft) until April 2029 with the option to break in in 2026;
• Woodlands Court, Bristol - Mobileum UK Ltd. has renewed its lease for a further three years to April 2025, with the option to break in 2023, at a rental income of £93,312 pa (£16.39/ sqft) on 5,693 sqft;
• Miller Court, Tewkesbury - Kingsbridge Risk Solutions Ltd. has renewed its lease for 4,500 sq. ft. for a further five years to March 2027 at a rental income of £70,000 (£15.56/ sqft);
• Mere Grange, St Helens - 5,022 sqft has been let to Balance Power Projects Ltd. for five years at a rental income of £66,474 pa (£13.24/ sqft);
• Oakland House, Manchester - Please Hold (UK) Ltd. has let 5,532 sqft for ten years with the option to break in in 2027 at a rent of £66,384 pa (£12.00/ sqft);
• Mere Grange, St Helens - 4,105 sq. ft. has been let to James Fisher Marine Services Ltd. for three years at a rental income of £57,470 pa (£14.00/ sqft);
• Elmbridge Court, Gloucester - X Cyber Group Ltd. has renewed its lease for 2,483 sqft for a further five years with the option to break in 2025 at a rent of £50,000 pa (£20.14/ sqft).

Since the quarter end, the Group has successfully completed the following lettings and sales:

• The Royals, Altrincham Road, Manchester - 4,872 sq. ft. of space has been let to Advanced Travel Partners UK Ltd. The lease is for ten years with a break option in 2027 at a rent of £65,344 pa (£13.41/ sqft);
• Finnieston Business Park, Glasgow - Previously vacant 3,300 sq. ft. of space has been let to Tag Digital Ltd. The lease is for five years with a break option in 2025 at a rent of £54,450 pa (£16.50/ sqft);
• Witham Park House, Lincoln - Distract Ltd. has renewed its lease for 4,353 sqft of space for a further ten years with a break option in 2027 at a rental income of £34,824 (£8.00/ sqft).

Residential Secure Income Plc (LON:RESI, 97.7p, 107.9p, -9.4%)

Residential Secure Income plc contracts to acquire 39 newly completed homes for delivery as shared ownership for net consideration of £7.5 million. The new homes consist of one, two and three‐bedroom apartments in new developments in Purley, Coulsdon and Addiscombe, which are all part of the London Borough of Croydon. The homes have been developed to a high specification, with timber parquet flooring, Silestone worktops, Bosch appliances and private balconies. The homes meet or exceed ReSI plc's sustainability criteria and include secure cycle storage, solar energy, electric vehicle charging points, and have an energy efficiency Environmental Performance Certificate rating of B. The acquisitions will complete in a staggered manner over the next few months to ensure that on completion the properties are ready for occupation by shared owners. All homes will be sold on shared ownership 999-year leaseholds with uncapped annual RPI + 0.5% linked rent increases, with the rental income underpinned by residents' ownership stakes in their homes. Once acquired and occupied the homes are expected to deliver an annual rent of £0.3mn and they will generate an expected inflation-linked leveraged yield in line with ReSI plc's 8% total return and c. 5% dividend targets.

The properties are being acquired from a local authority house builder and will be held by ReSI plc's wholly owned registered provider of social housing, ReSI Housing Limited, and part financed by government grant. The properties will be managed by ReSI Property Management Limited in line with the best practice approach set out in Gresham House's shared ownership customer and environmental charters.

Schroder Real Estate Investment Trust Plc (LON:SREI, 54.3p, 70.4p, -22.9%)

Schroder Real Estate Investment Trust Limited, the actively managed UK-focused REIT, announced the acquisition of St. Ann's House in Manchester, for £14.7 million, reflecting a net initial yield of 7.8%, a reversionary yield of 9.1% and a low average capital value of £283 per sqft. The mixed-use office and retail asset generates £1.22 million per annum of headline rent compared with an estimated rental value ("ERV") assessed by the independent valuer of £1.33 million.

The freehold, 51,885 sqft building, is 96% occupied and comprises 40,277 sqft of office space over five upper floors with five retail units at the ground floor level and ancillary basement space. It is prominently located on St. Ann's Square, near to the prime retail core. St. Ann's Square features a listed church, the Royal Exchange theatre, a mix of office occupiers and high-quality luxury retail as well as leisure operators. The building benefits from its proximity to two tram stations that are within four and eight minutes' walk respectively.

Secure Income REIT Plc (LON:SIR, 470.0p, 424.1p, +10.8%)

Secure Income reports interim results. Key details are:

• EPRA adjusted earnings up 37% year-over-year, to £4.2 million (H1 21: £3.1 million);
• Net rental income up 25%, to £7.6 million (H1 21: £6.1 million);
• EPRA Net Tangible Assets ("NTA") total return of 2.8% (H1 21: 2.7%);
• £15 million equity raise in February 2022, fully committed to £28 million of shared ownership;
• 40% of directly rented EPC D-rated properties upgraded to C in six months, in line with target of achieving minimum EPC ratings of C for all directly rented properties by 2025;
• 41% growth in shared ownership portfolio to 765 homes, including committed acquisitions;
• Like-for-like property valuation increase of 1.6% driven by 1.6% like-for-like rental growth;
• Occupancy increased to 95% as at March 22 (March 21: 93%);
• 99% of rent collected during the half year to March 2022, highlighting the security underlying ReSI plc's inflation-linked income.

Shaftesbury Plc (LON:SHB, 597.5p, 619.0p, -3.5%)

The Boards of Shaftesbury plc and Capital & Counties Properties plc confirm that they are in advanced discussions regarding a possible all-share merger of the two companies. The possible merger would create a REIT focused on the West End of London with a portfolio of c. 2.9 million square feet of lettable space located in high-profile destinations including Covent Garden, Carnaby, Chinatown and Soho. The combined ownership would comprise c. 1.8 million square feet of retail and hospitality space, together with office and residential accommodation of c. 1.1 million square feet.

These discussions continue to progress. Shaftesbury has requested an extension to the date by which Capco is required either to announce a firm intention to make an offer or to announce that it does not intend to make an offer. Capco must now make such announcement no later than 5.00pm on 17 June 2022. This deadline can be extended by the Board of Shaftesbury with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

Shaftesbury plc, the Real Estate Investment Trust that owns a 16-acre portfolio in London's West End, announced the acquisition of a 200 year ungeared leasehold interest in the lower floors of 92-104 Berwick Street, Soho, for £27.5 million (excluding purchase costs). Purchased from the Administrator of Berwick Street Securities LLP, the interest comprises c. 15,600 sqft of retail accommodation and c. 3,600 sqft suitable for restaurant uses. Of the total space, 5,400 sqft has been let to a supermarket, which is now open and trading. The remainder is vacant and in shell condition. Capital expenditure of £2.6 million is anticipated to meet the market-standard specification now expected by occupiers.

Shaftesbury plc announced its results for the six months ended 31 March 2022. Key details are:

• Footfall continues to improve, building during the week, peaking at weekends; growing numbers of international tourists;
• Occupiers reporting growing turnover; monthly sales now on average 7% ahead of pre-pandemic levels; hospitality and leisure: +9%, retail +4%;
• Recovery in key operating metrics, EPRA earnings and net tangible assets;
• Leasing transactions with a rental value of £18.9m completed during the period:
  • Commercial lettings and renewals: £13.3m, concluded on average 6.3% ahead of 30.9.21 ERV;
  • Commercial rent reviews (£3.3m) concluded 17.9% above previous rents;
  • 81 residential lettings (£2.3m), 6.2% up on previous rents.
• Leasing momentum maintained since 1 April 2022;
• EPRA vacancy decreased to 4.7% of portfolio ERV (30.9.21: 6.0%);
• Rent collection continues to improve reflecting sustained recovery in trading conditions and good occupier demand for space:
  • 95% of invoiced rents for the period now collected;
  • Expect a continued improvement in collection rates and further recoveries against arrears.

• Valuation increases: hospitality and leisure +7.8%; retail +7.1%; offices +8.6%; residential +6.4%;
• Portfolio ERV up 6.4%2 to £140.9m (30.9.21: £131.7m), with increases across all uses, reflecting letting activity and much-improved occupier market sentiment:
  • Hospitality: +6.4%;
  • Retail: +5.9%;
  • Offices: +4.0%;
  • Residential: +11.1%.
• Almost half of the 12.5% portfolio ERV decline suffered during the pandemic now recovered; overall, now, 6.9% below valuation at 30.9.2019, with both offices and residential ahead of pre-pandemic levels (like-for-like);
• Focus on re-use and repurposing buildings, prioritising retention of existing structures rather than demolition and rebuilding;
• Continuing commitment to support local communities, particularly focusing on young people.

Standard Life Investments Property Income Trust Plc (LON:SLI, 80.5p, 106.6p, -24.5%)

Standard Life Investments Property Income Trust announced an update on its trading activity. Key details are:

• Net asset value per ordinary share was 106.6p (Dec 2021 – 101.0p), an increase of 5.5% for Q1 2022, resulting in a NAV total return, including dividends, of 6.6% for the quarter;
• The portfolio valuation increased by 4.4% on a like for like basis, whilst the MSCI Monthly Index increased by 4.4% over the same period;
• Six new lettings completed in the quarter, four in the office sector, one industrial and one retail warehouse unit re-let as a gym;
• Refurbishment / PV schemes progressing on three industrial / logistics assets to provide operational net zero units;
• Purchase of £5m car showroom asset completed after quarter end at a yield of 6.5%;
• Strong balance sheet with significant financial resources available for investment of £45 million in the form of the Company’s low cost, revolving credit facility of £55 million net of current cash after dividend and other financial commitments;
• As at 31 March 2022, the Company had a Loan to Value (“LTV”) of 18.6%. The debt currently has an overall blended interest rate of 2.725% per annum;
• Following the dividend increase announced for the prior quarter, dividend cover for Q1 2022 is 103%.
• Rent collection is beginning to normalise, although disappointingly a number of tenants continue to pay late and require a lot of chasing, or pay monthly despite the lease terms being quarterly.

Target Healthcare REIT Plc (LON:THRL, 117.8p, 111.8p, +5.4%)

Target Healthcare, the UK listed specialist investor in modern, purpose-built care homes, announced its unaudited quarterly Net Asset Value ('NAV') as at 31 March 2022, together with an update on corporate activity, and declares its third interim dividend for the year ending 30 June 2022. Key details are:

• EPRA Net Tangible Assets ('NTA') per share increased by 0.9% to 111.8 pence (31 December 2021: 110.8 pence), primarily reflecting valuation uplifts across the portfolio driven by inflation-linked annual rental uplifts and modest yield compression;
• NAV total return of 2.5% for the quarter:
  • 34% increase in Adjusted EPRA earnings to £9.0 million from £6.7 million, reflecting a full quarter's rental income from the portfolio acquired during the prior quarter and one-off rental income of £0.8 million arising from successful re-tenanting.
• Two acquisitions, including one completed post period end, for a total investment of £23 million;
• Low Net Loan to Value of 20.3% (31 December 2021: 20.7%);
• Available investible capital (comprising cash and undrawn debt) at 30 April 2022 of £67 million, fully allocated to pipeline deals in diligence;
• Diversified portfolio of 99 assets let to 33 tenants and valued at £886.8 million:
  • 1.1% like-for-like valuation increase of the operational portfolio; 0.7% from rent reviews and 0.4% from continued yield compression;
  • Social impact from real estate which best serves care providers and their underlying residents; strong ESG credentials - 92% of the portfolio A or B EPC rated;
  • Portfolio EPRA "topped-up" net initial yield of 5.82% (31 December 2021: 5.84%).

• Rental growth from inflation-linked, annual rent reviews, with 20 rent reviews completed at an average uplift of 3.9% per annum average, contributing to a 0.7% increase in like-for-like contracted rent;
• 1.2% overall increase in contracted rent roll, including acquisitions and asset management;
• Weighted average unexpired lease terms of 27.3 years, one of the longest within the listed real estate sector (31 December 2021: 27.5 years);
• Successful re-tenanting of a group of four homes completed in the quarter from a large national operator to a local operator, who is better positioned to provide successful future trading. Financial terms are accretive to returns, with a lease surrender premium received to reflect the revised lease terms and the incoming tenant covenant;
• Third interim dividend of 1.69 pence per share declared for the year ending 30 June 2022, representing an increase of 0.6% on the FY 2021 quarterly dividends. On an annualised basis, this reflects a payment of 6.76 pence per share and a dividend yield of 6.2% based on the closing share price of 109.2 pence on 4 May 2022.

Tritax Big Box REIT Plc (LON:BBOX, 203.6p, 194.2p, +4.8%)

Tritax Big Box REIT announced an update on its performance for the period 1 January 2022 to date. Key details are:

• Near record levels of demand from a range of occupier types with 10.4 million sqft of take up in Q1 2022, up 102% on Q1 2021;
• Nationwide vacancy rate remains at 1.6%. The shortage of vacant space is encouraging occupiers to lease speculative buildings under construction or commit faster to new build to suit projects;
• Q1 2022 logistics investment volumes totalled £2.5 billion, up 19% on Q1 2021, with yields for high-quality investments tightening to approximately 3.25%;
• Undertaken rent reviews and lease extensions delivering a £1.3 million increase in annual contracted passing rent; including:
  • 10-year lease renewal at Tesco Nursling, acquired in November 2020, delivering a 23% increase in rent;
  • Lease extension at BSH, Corby increasing the term to 15 years, adding significant value.

• On track to complete the remaining 30% of contracted rent roll subject to review in FY22;
• Robust portfolio fundamentals with 100% occupancy let to institutional grade occupiers on long leases efficiently converting rental income into value for shareholders;
• Extended a £50.9 million loan facility with Helaba by 3-years to a new maturity of July 2028 with no change in margin;
• Loan to value at Q1 2022 of 24.2%;
• Current weighted average cost of debt is 2.27% of which 69% is fixed and benefits from an average 6.5-year maturity.

Development progress in the year-to-date included:

• 1.8 million sqft of construction commenced, 56% pre-let, securing £6.0 million of contracted rent;
• 3.1 million sqft of developments currently under construction:
  • 1.3 million sqft pre-let or let during construction, securing £8.4 million of contracted rent;
  • Remaining units have the potential to add a further £15.2 million to contracted rent.
• Planning consent secured for a further 0.6 million sqft of development, across two sites.
• On-track to deliver an accelerated level of 3-4 million sqft of development starts in FY2022, within the 6-8% yield on cost target range, the earnings impact of which will be delivered through FY2023 and FY2024.

Tritax EuroBox Plc (LON:EBOX, 96.0p, 135.0p, -28.9%)

Tritax EuroBox reports its results for the six months ended 31 March 2022. Key details include:

• Strong total return of 12.4%, ahead of the annual target of 9%, reflecting portfolio quality;
• Portfolio value growth of 32% to €1,689.1 million (30 September 2021: €1,281.4 million), driven by like-for-like valuation increase of 8.1%, €234.5 million of acquisitions and €59.7 million of development expenditure;
• Like-for-like rental income movement (annualised at period end) of -1.5%, reflecting a new vacancy in Strykow, Poland. Excluding the vacancy, like-for-like rental income growth was +0.9%;
• Actively managing the balance sheet to provide financial resilience and capacity for growth as well as reducing the cost of debt:
  • Issued first private placement of €200 million of senior unsecured loan notes with a weighted average coupon of 1.368% and maturity of nine years;
  • Fitch senior unsecured credit rating upgraded to BBB from BBB- providing support for further debt issuances;
  • LTV of 27.9% (30 September 2021: 13.3%) or 39.5% including all committed expenditure on developments, acquisitions since the end of the reporting period and asset management.

• Take-up in core markets totalled 28.3 million sqm in the year to Q1 2022, up 23% year-on-year;
• European vacancy fell to 3.0% at Q1 2022 (Q1 2021: 3.9%). Rental growth has become increasingly widespread across Europe;
• High-quality portfolio let to institutional-grade occupiers on long-dated, inflation -linked leases:
  • Attractive, long-dated leases with weighted average unexpired lease term of 8.5 years as at 31 March 2022 (30 September 2021: 9.3 years);
  • 98% of assets are income producing. Of these, 77% review based on consumer price indices, 13% are fixed reviews, and the remaining 10% do not review. The non-reviewing income represents temporary rent guarantees or license fees;
  • Estimated rental value growth of 5.4% in the period (0.9% six months ending 30 September 2021).
• Development schemes under way in Barcelona and Strykow progressing well:
• Barcelona extension expected to complete in November 2022 adding a further €2.8 million to annual rent at a 7.1% yield on cost.
• Strykow extension expected to complete in June 2022 adding a further €0.65 million of annual rent.
• Further opportunities to drive future income and capital growth from:
  • Annual uplifts from the index-linked leases;
  • Capturing 9.0% reversionary potential across the portfolio;
  • Leasing 125,249 sqm of available floor space;
  • Developing 77,700 sqm of new floor space on vacant land;
  • Brownfield redevelopment of 60,700 sqm.
• Acquired seven assets in Germany, Italy, Sweden and the Netherlands for total consideration of €435.1 million in the period, at yields ranging between 3.5% and 4.7%, including both income-producing assets and development projects, which give the opportunity for value creation during construction and leasing.

UK Commercial Property REIT Plc (LON:UKCM, 85.4p, 111.2p, -23.2%)

UK Commercial Property REIT announced a trading update for the quarter to 31 March 2022. Key details are:

• 9.0% growth in NAV per share to 111.2p (31 December 2021: 102.0p) for the quarter, which has resulted in a NAV total return of 9.8% for the quarter;
• Valuation increases across all asset classes led to 7.9% growth in the like-for-like portfolio to £1.67 billion, net of capital expenditure;
• Rent collection for billings raised in the first quarter of 2022 stood at 95% after allowing for agreed rent deferrals and including those tenants who have paid, by agreement, on a monthly basis. This figure is expected to rise throughout the Quarter;
• Quarterly dividend increased by a further 6.7% to 0.80p per share, following the 16.4% increase announced in relation to the fourth quarter of 2021;
• EPRA earnings per share for the quarter of 0.76p (31 December 2022: 0.90p, which included the reduction of bad debt provisions against the Company’s largest arrear), giving dividend cover for the quarter of 101%;
• Low void rate of 2.4% (2.1% at Q4 2021) as the asset management team continued excellent progress on growing the portfolio’s income and driving value;
• Robust balance sheet with £85 million available to invest from current resources, comprising the £110 million available through the low cost, revolving credit facility and existing cash. Together, these resources provide the Company with significant liquidity and flexibility at both a corporate and portfolio level to fund further acquisitions;
• The Company’s gearing was 12.6% as at 31 March 2022. The drawn debt had an overall blended interest rate of 2.79% per annum with a weighted maturity of 6.1 years;
• Rent collection rates normalised throughout 2021 and this has continued in the first quarter of 2022. Payments received so far for Q1 billings (covering April to June 2022) reflect 95% of rents due as at close of business on 29 April 2022, after allowing for agreed rent deferrals and including those tenants who have paid, by agreement, on a monthly basis.

Notable transactions over the last quarter include:

• The Company negotiated an agreement for the Secretary of State to extend its occupation of the Company’s 70,000-sqft office building in Bristol for a further three years with a 9% increase in rent to £1.72 million per annum. The asset is in a prime location within Bristol’s office core directly opposite Temple Meads railway station and, as part of the negotiations, the Secretary of State agreed to move the lease outside of the Landlord & Tenant Act, providing improved flexibility for a future redevelopment or refurbishment;
• At its Gilmore Place student housing development, the Company successfully negotiated and agreed a 20-year lease with the University of Edinburgh at an annual rent of £1.24 million per annum, which is subject to annual CPIH increases with a cap and collar of 1 - 4%.  The Company had originally expected to operate and lease the asset independently to generate a higher level of rent but decided that the opportunity to fix a long term guaranteed and growing income stream from a first-class tenant covenant was in the best interests of shareholders, particularly given the anticipated valuation increase compared to the original business plan.  This new lease was agreed in April 2022 after the period end and provides certainty of income for a development which is due to complete in time for the commencement of the 2022/23 academic year;
• Development has commenced of the land acquired with Precision Park, the life sciences and tech focused industrial and business park which the Company purchased in Leamington Spa in December last year.  The new 67,700-sqft sub divisible unit is targeting strong ESG credentials and environmental performance with an EPC of A and a BREEAM rating of Very Good.  Practical Completion is scheduled to take place in January 2023.

Warehouse REIT Plc (LON:WHR, 158.1p, 173.8p, -9.1%)

Warehouse REIT, the AIM-listed company that invests in logistics, e-commerce, industrial and last-mile warehouse assets in the UK, announced its intention to apply for the Company's ordinary shares to be admitted to listing on the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the premium segment of the main market of the London Stock Exchange plc. The Company's admission to trading on AIM will be cancelled with effect from Admission.

Warehouse REIT also announced its results for the year ended 31 March 2022. Key details are:

• EPRA net tangible assets per share up 28.6% to 173.8 pence (31 March 2021: 135.1 pence), primarily due to the revaluation increase of 38.5 pence per share;
• Dividends totalling 6.4 pence per share paid or declared in respect of the year, ahead of the full-year target of at least 6.2 pence per share;
• Total portfolio valued at £1,012.0 million (31 March 2021: £792.8 million), with a like-for-like valuation uplift of 19.4%;
• Portfolio valuation comprised £913.0 million in relation to the investment portfolio of completed assets and £99.0 million of development property and land (31 March 2021: £751.9 million and £40.9 million);
• Total accounting return for the year of 33.2% (year ended 31 March 2021: 27.7%);
• Continued strong rent collection performance, with 98.7% of rent due in relation to the year collected at 19 May 2022;
• Bank debt of £271.0 million and cash balances of £16.7 million at the year end, resulting in a loan to value ("LTV") ratio of 25.1% (31 March 2021: 24.6%);
• Acquired six investment assets totalling 176,500 sqft plus adjacent development land in Cambridge and Crewe, reflecting a blended net initial yield of 4.2% (excluding the development land). Total consideration for the acquisitions was £43.4 million (including costs);
• Exchanged contracts to acquire an asset via a forward funded development arrangement for £35.0 million. A 12-month rent guarantee has been agreed with the vendor and would show a running yield in excess of 4.6%;
• Further progress with the Group's sustainability strategy, including improvements to assets' sustainability performance and EPC ratings through asset management, conducting an ESG survey with more than 30 of its largest occupiers and setting a range of ESG targets to track progress with its strategy;
• Completed 116 lease events across 0.9 million sqft of space, contributing to like-for-like rental growth of 3.0%;
• 62 new lettings, generating rent of £2.8 million per annum at 3.0% ahead of estimated rental value ("ERV"). If three agreements-for-lease agreed during the year and, due to complete shortly are included, this increases to 5.3%. The ERV across the portfolio has grown by 6.0% on a like-for-like basis;
• 54 lease renewals, securing income of £3.0 million and achieving a 22.2% increase over previous contracted rents;
• Investment portfolio capital expenditure of £6.5 million (year ended 31 March 2021: £1.9 million), to drive rental and capital value growth;
• Occupancy of 93.7% at the period end (31 March 2021: 95.6%). Effective occupancy, which excludes units undergoing refurbishment or under offer to let, was 95.8% (31 March 2021: 98.2%);
• Planning application for another 1 million sqft of new warehouse space submitted at Radway 16, Crewe, bringing the total developable space to 1.8 million sqft;
• WAULT of 5.6 years at the period end (31 March 2021: 5.8 years), reflecting the benefit of acquisitions and asset management initiatives offsetting the natural reduction in WAULT over time;
• In April 2022, exchanged contracts to acquire Bradwell Abbey Industrial Estate, Milton Keynes, for £62.0 million excluding acquisition costs;
• In May 2022, the Group extended the RCF by £25.0 million; the tenure and applicable interest rate are unchanged from the existing facility;
• In May 2022, the Group signed an agreement with Panattoni to accelerate the development of its logistics park situated at Radway 16, Crewe just off J16 of the M6 motorway. The project will start on site Q4 2022 with first buildings being available for occupation 2023.

Data sourced through the London Stock Exchange and RNS announcements.