Warehouse REIT (WHR) spent its first full year as a publicly listed company beefing up its portfolio of multi-let, motorway-flanking warehouses, adding sites in Glasgow, Cheshire and Cheltenham. However, acquisition activity was amplified by investment manager Tilstone Partners, following a £76.5m post-year-end placing, of which more than half has been used to acquire four assets totaling 568,600 square feet of floorspace.
The specialist REIT is capitalising on a lack of supply of small- to medium-sized warehouses, as new construction continues to be hampered by high build costs. Sixty-two lettings were completed in the year to March, generating annual rent of £2.1m, which was 13 per cent ahead of estimated rental values.
Meanwhile, rent renewals contributed income of £1.5m, and a 14.6 per cent increase in contracted rents. Refurbishment of vacated units can add between £5 and £7 in rental value per square foot, according to Tilstone Partners' Andrew Bird. Asset recycling is also boosting investment firepower. Four disposals generated £19m in the period, equivalent to a 27 per cent premium to the assets' March 2018 book values.
Analysts at house broker Peel Hunt expect adjusted net assets of 111p a share at the March 2020 year-end, rising to 119p in FY2021.
WAREHOUSE REIT (WHR) | ||||
ORD PRICE: | 105.5p | MARKET VALUE: | £253m | |
TOUCH: | 104.5-105.5p | 12-MONTH HIGH: | 107p | LOW: 91p |
DIVIDEND YIELD: | 5.7%^ | TRADING PROPERTIES: | nil | |
DISCOUNT TO NAV: | 4% | |||
INVESTMENT PROPERTIES: | £312m | NET DEBT: | 67% |
Year to 31 Mar | Net asset value (p) | Pretax profit (£m) | Earnings per share (p) | Dividend per share (p)^ |
2018* | 102 | 8.4 | 5.04 | 2.5 |
2019 | 110 | 22.8 | 13.7 | 6.0 |
% change | +8 | +172 | +172 | +140 |
Ex-div: | 30 May | |||
Payment: | 28 Jun | |||
*Trading for 1 Aug to 31 March. ^Dividends paid quarterly, XD and payment dates refer to fourth-quarter dividend of 1.5p. |