Warehouse REIT, which raised gross proceeds of £150 mln (€170 mln) at its Initial Public Offering last week,has exchanged contracts with Hansteen Holdings to acquire four multi-let industrial estates in England for a total of £26 mln plus costs.
Warehouse REIT has said at IPO that it was in advanced negotiations with the vendors of a number of assets, totalling £88 mln.
The deal with Hansteen reflects a net initial yield of 7.5%.
The company was spun off from existing industrial property business Tilstone and seeded with an initial Tilstone portfolio valued at £109 mln.
Two of the estates are located in the North West, one in the Midlands and one in the South East, are all either in urban areas or on infrastructure links. The estates cover a total floor area of 603,000 sq ft (56,000 m2) and generate an annual net rent of £2.11 mln.
With an average passing rent equating to £3.50 per square foot, the company believes there is potential for long term rental growth. 'This transaction is firmly in line with our investment strategy set out at the time of the IPO, for good quality, well located assets with plenty of opportunities to enhance value through asset management,' said Neil Kirton, non-executive chairman of Warehouse REIT.
He added: 'While the vendor has run a successful letting campaign with voids down to 9% of estimated rental value, this reflects slightly more than the national average which is characterised by a shortage of well-located warehouse stock, driven by the structural shifts taking place in last mile delivery.'
Warehouse REIT is targeting a dividend yield of 5.5p equivalent to a yield of 5.5% for the year ending 31 March 2019, and a total return of at least 10%, through a combination of dividends and NAV growth.
