Warehouse REIT said this week that it plans to raise up to £175 mln (€194 mln) in a share issue aimed at funding new acquisitions.
Under the operation, the firm will issue up to 159 million new shares for a price of 110 pence a share, representing a premium of 0.5% to the net asset value per share as at 31 March 2020 and a discount of 1.35% to the closing price on the day prior to the announcement.
Proceeds will be use to finance a number of new investment opportunities at a time when demand for warehouse space is increasing, driven by the growth in e-commerce, the company said.
It has identified a pipeline of investment opportunities amounting to £346 mln, of which over £123 mln are in exclusive or final negotiations and a further £223 mln are in detailed negotiations, including several with an e-commerce focus.
Neil Kirton, chairman of Warehouse REIT, said the market is experiencing an increasing polarisation between different real estate sectors during this period of unprecedented disruption.
‘The UK urban warehouse sector has proven itself to be firmly on the right side of this divide, as the structural trends underpinning the rapid growth of e-commerce have accelerated, supporting strong demand from occupiers seeking to futureproof their businesses. Furthermore, the motivated pool of sellers we witnessed earlier in the year has expanded as a result of recent market uncertainty, resulting in acquisition opportunities at attractive entry levels and supporting our view that now is the right time to deliver on our stated strategy of significantly scaling the REIT,’ he said.
Andrew Bird, managing director of Tilstone Partners Limited, the manager of Warehouse REIT, added: ‘We remain steadfast in our conviction that the "last mile" UK warehouse sector has all the characteristics that should appeal to investors seeking attractive returns from their real estate investment. This has been reinforced by strong rental collection figures throughout the lockdown period, the encouraging conversations that we are having with our diverse range of occupiers, as well as the asset management initiatives we are continuing to execute as we secure new lettings and re-gears with good covenants significantly ahead of previous rents and ERVs.’
The company, which has been listed since 2017, owns around £450 mln of logistics assets in the UK.
