April 8, 2020
Industrial REIT Urban Logistics has bought nine properties and a development site for £56.1m.
The acquisitions were made after the business raised £136.1m in an equity capital raise, which completed last month.
With an average yield of 6.3%, the deals included a portfolio of seven single-let regional distribution warehouses bought from Paloma Capital for £31.9m; an NHS distribution centre in Normanton for £13m and a regional distribution centre in Rubery for £5.5m. Individually, the transactions reflected yields of 6.8%, 5.2% and 6% respectively.
Urban Logistics also signed a conditional agreement for the forward funding of a new property on a 3-acre site in Peterborough.
The business said it was in the final stages of buying another portfolio, with a deal expected to complete at the end of this month.
The deals came as the business confirmed it had collected 93% of its second quarter rent, compared with 91% at the same time last year.
The REIT said it currently has £94m of cash resources available. Its existing debt facility is set to mature in December 2022 and the business said it had “significant” covenant headroom. It added it was in advanced discussions for increased banking facilities.
“Covid-19 has posed challenges for business and society as governments seek to manage the contagion and its long-term impact. Throughout this crisis our priority has been ensuring that the company operates safely and in line with the government’s evolving guidance,” said Urban Logistics chief executive Richard Moffit.
“The crisis has highlighted the importance of warehousing and distribution real estate, especially scarce regional and last mile properties focused on essential goods and consumer staples.
“Having raised £136m from new and existing shareholders in March, we are delighted to have deployed £56 million into these regional logistics properties close to established urban locations. The properties are well located and provide a good balance of asset management opportunities and income.
“Our strong balance sheet, conservative debt and robust rent roll performance enables the business to manage the impact of Covid-19. We will continue to proceed cautiously and review further acquisition opportunities and report on these when appropriate.”