Warehouse REIT, a new company spun off from existing industrial property business Tilstone, has raised gross proceeds of £150 mln (€170 mln) at its Initial Public Offering.
The company will invest the proceeds into a diversified portfolio of UK warehouse assets including Tilstone, a hand-picked seed portfolio of 27 freehold and long leasehold warehouse assets which it will acquire for £109 mln. The package is let to 129 tenants including Boots, Amazon, Asda and Selco Trade Centres and delivers a 7% net initial yield.
Warehouse REIT has also identified and entered into preliminary negotiations with the vendors of a number of assets, totalling £88 mln.
'The majority of the proceeds from the issue will be deployed into the Tilstone property portfolio providing investors with immediate exposure to a strongly performing portfolio that has further asset management opportunities and inbuilt reversion. Together with a high quality pipeline of future investment opportunities, we are confident that Warehouse REIT will provide shareholders with an attractive income focussed total return,' commented Neil Kirton, Non-executive Chairman of Warehouse REIT.
A wide variety of investors participated in the offering, he added. 'We have seen strong take up from pension fund managers, wealth managers, specialist real estate investors and retail investors, resulting in a broad shareholder register from the outset from which to grow the Warehouse REIT.'
Tilstone's management team is participating in the offering with a £16 mln equity investment.
Warehouse REIT said it 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.
