Urban Logistics REIT doubles in size in transformational year
Urban Logistics REIT announces a 23.9 percent increase in NAV and doubles the size of its portfolio over a “transformational year.”
The group said its portfolio of mid-box urban warehouses was now valued at £1,015m (up 99.9%) – thanks to acquisitions and a 25.4 percent like-for-like portfolio valuation uplift. In the 12 months to 31 March 2022, the group raised £358m of equity, moved to the main market, and was included in the FTSE 250 index.
Due to this, the company’s EPRA NAV increased by 23.9 percent to 188.8p per share.
Because of recent acquisitions, net rental revenue increased dramatically from 2021 to £36.5 million, and adjusted earnings per share were 6.71 pence (impacted by the capital raises).
Dividends totaled 7.6p for the entire year (the same as the previous year). Since its debut, the NAV has generated yearly total returns of 16.4 percent. The NAV total return with dividends was 29 percent.
Due to the expansion of its portfolio, the group has a very low loan-to-value (LTV) of 11.3 percent (2021: 27.9 percent). With a weighted average cost of debt of 2.55 percent, it has debt of £239 million.
highlights of a portfolio
During the year, significant capital was deployed, including:
£282 million in acquisitions at a weighted average net starting yield of 5.3%
Nine forward funding agreements totaling £52.9 million have been made, with a current yield on cost of 6.7%.
The whole portfolio now consists of 113 mid-box urban logistics properties totaling 8.3 million square feet with a £1,015 million valuation (up 99.9 percent )
The EPRA vacancy was kept at 6.9% WAULT of 7.7 years (2021: 7.4 years)
With like-for-like rental increases of 16.4%, 25 new lease events were conducted during the year.
Outlook
After raising $250 million in December, the company claimed that it was “well funded and on schedule to be fully deployed in the first half of the financial year, at a blended net initial return in excess of 5%.”
It further stated that through asset management measures, its portfolio was set up for future development in rentals and values.
It aims for an LTV at the lower end of its target range of 30 percent to 40 percent and will attempt to boost debt from existing facilities to expand the portfolio further. The company stated that it expects a year of modest earnings growth, with the dividend at the very least expected to be maintained.
According to the report, landlords continue to benefit from a robust supply/demand dynamic in the urban logistics industry, which might give rents an inflation-beating boost.
“Our strategy of focusing on mid box, last mile, single let logistics assets has continued to perform,” said Richard Moffitt, CEO. “The company delivered a total accounting return of 29 percent in the year and 16.4 percent on average over the years since IPO. This plan has been carried out by making smart purchases; our acquisitions this year have an average net starting yield of 5.3% and have given us the chance to increase income and value through asset management efforts.
The company is well-capitalized and continues to profit from the structural changes, said Nigel Rich, chairman.