LONDON (ShareCast) - (Sharecast News) - Urban Logistics reported significant recent progress in a trading update on Monday, having signed four new lettings in the second quarter, contributing £0.85m in additional rental income.
The FTSE 250 real estate investment trust said it also successfully concluded two rent reviews during the same period, resulting in a weighted average uplift of 20%.

In line with its strategic growth objectives, Urban Logistics said it divested two assets in the quarter, generating gross proceeds of £15m. representing a 3.4% premium to the March valuations.

Additionally, Urban Logistics said it secured £57m of new fixed-rate debt to refinance existing floating-rate debt.

As a result, its total debt book now stood at £367m drawn, with an additional £51m of undrawn facility.

Notably, 93% of the debt was hedged or fixed to term, reducing exposure to interest rate fluctuations, while the average maturity of the debt stood at six years.

Urban Logistics said the new debt was provided by Aviva Investors, and was a sustainability-linked loan.

Looking at the recent administration of Tuffnell's, Urban Logistics said it had successfully reassigned nine of the 12 affected leases on the same terms.

Additionally, the firm said it was actively marketing three smaller units, representing 0.45% of the rent roll.

"Against a backdrop of a challenging economic and equity market environment our focus is on delivering strong operational and financial performance," said Richard Moffitt of Urban Logistics.

"Our active asset management continues to drive performance and is supported by continued demand from tenants alongside a low national vacancy rate.

"The rent reviews and new lettings signed in the period have delivered significant additional income to the portfolio and the company has selectively sold a number of assets where our asset management initiatives are substantially complete."

Moffitt said those assets were sold at a premium to their March valuation.

"The recent refinancing means the company has a very secure debt position, with capital available to be allocated as opportunities arise - 93% of the debt is now hedged or fixed to term, with the earliest debt maturity is in August 2025.

"The market for assets in the company lot size remains robust and over the coming months we intend to recycle additional assets, further validating our net asset value.

"The board consistently reviews the best use of capital and, where appropriate, will use the funds to selectively acquire assets which have compelling value accretive asset management opportunities to deliver strong income and total returns."

At 0807 BST, shares in Urban Logistics REIT were up 1.47% at 124.4p.

Reporting by Josh White for Sharecast.com.

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