AIM-listed warehouse investor Warehouse REIT has acquired a 51-property industrial portfolio from Hansteen Holdings in an off-market deal worth £116 mln (€132 mln).
Following the deal, Warehouse REIT said that it has deployed all the funds (£150 mln) raised at IPO in September 2017, significantly ahead of plan, for a total investment of £279 mln to date.
The 51 properties provide over 500 leasable units delivering a total floor area of 1.65 million sq ft, the majority of which are located in the Midlands and South of England. Approximately 93% of the floor area is invested in light industrial property with the 7% balance representing other workspace and offices. The current contracted rent roll is £8.5 mln from 382 distinct tenants.
The portfolio is being acquired with an occupancy rate of 92% and a weighted average unexpired lease term of 3.9 years.
The acquisition will be funded from existing cash resources and enlarged debt facilities of £135 mln (previously £65 mln), secured with HSBC. HSBC has increased the Company’s current revolving credit facility from £35 mln to £105 mln, for the same duration of five-years but at a reduced coupon of 2.25% above LIBOR (previously 2.40% above LIBOR). This enlarged facility is on the same terms as the existing £30 mln fixed term loan with HSBC.
Commenting on the transaction, Neil Kirton, Non-Executive Chairman of Warehouse REIT, said: 'This acquisition provides us with a meaningful portfolio of good-quality and well-located assets that are perfectly aligned with Warehouse REIT’s investment strategy. The portfolio is well known to management who have tracked it for some time and we are pleased to now be in a position to take ownership of it.'
Hansteen had acquired the portfolio through its offer for IMPT in April 2017. 'We absorbed the portfolio into our UK property asset management platform and were in the process of successfully increasing the occupancy and income across the portfolio,' said Ian Watson and Morgan Jones, Joint Chief Executives of Hansteen. 'However, during the successful implementation of this strategy, we received an unsolicited approach from Warehouse REIT to acquire the Portfolio at a level which provides a return in excess of our initial expectations and which we were willing to accept.'
The deal is expected to completed by the end of March 2018.
