Warehouse REIT collects 94pc of June quarter rent
By Josh White
Date: Thursday 06 Aug 2020
(Sharecast News) - Warehouse REIT updated the market on Thursday, reporting that 94% of contracted rent due for the June quarter had been received, or was being collected monthly, as at 30 July.
The AIM-traded real estate investment trust said discussions were ongoing for the balance.
It said it was taking a "proactive approach" towards collecting rent, and had agreed to monthly advance payments amounting to 27% of its contracted rent, of which 60% had already been received.
Warehouse REIT said it was still exercising a "cautious approach" in its use of debt, ensuring it had a well-capitalised balance sheet.
As at 30 July, it had £111m of available cash and £63m of undrawn bank facilities, providing what the board called "significant" operational flexibility.
On 21 July, it exchanged contracts to dispose of seven smaller, non-core assets for a total of £9.9m, reflecting a blended net initial yield of 6.1%, as part of its strategy to recycle capital into higher returning opportunities.
The disposals were in line with the 31 March book value, and improved both the "quality and duration" of income of the core portfolio.
Looking at its pipeline, Warehouse REIT said its investment advisor, Tilstone Partners, was making "good progress" delivering on acquisition opportunities identified at the time of its capital raise in July, which amounted to about £346m.
The amount in exclusive or final negotiations, or with solicitors instructed, had increased from the £123.3m previously reported, and the company said it expected to update the market before the end of the half-year.
At Radway Green - its 25-acre multi-let industrial estate at junction 16 of the M6 motorway in Cheshire - a planning application had been submitted in collaboration with the adjoining owner for a combined 803,000 square feet of new high-bay warehouse units, ranging from 60,000 to 340,000 square feet.
The application retained an amount of existing space, which was currently income-producing, while using the undeveloped areas of the current estate.
Warehouse REIT said the overall scheme was expected to be implemented in a number of phases, in order to both maximise retained income, and to meet occupier demand.
It said it expected the application to be determined in the fourth quarter.
"The UK warehouse occupational market remains robust, underpinned by those structural trends including e-commerce that are being accelerated as a result of Covid-19," said Tilstone Partners managing director Andrew Bird.
"Alongside a number of ongoing asset management successes, we are focused on assisting the company in deploying its available capital into the significant pipeline of accretive opportunities the team has identified, and which will further improve the portfolio's income and diversification characteristics."
At 1239 BST, shares in Warehouse REIT were down 0.25% at 109.73p.
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