Urban Logistics REIT - Performance Update: Debt Refinance & Acquisitions

Urban Logistics Reit

17/09/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240917:nRSQ4089Ea&default-theme=true

RNS Number : 4089E  Urban Logistics REIT PLC  17 September 2024

17 September 2024

Urban Logistics REIT plc

("Urban Logistics" or the "Company")

Performance Update: Debt Refinance and Acquisitions

Introduction

 

Urban Logistics (LON: SHED), the only London listed REIT offering a focused
exposure to single-let, last mile/last touch logistics real estate, announces
that it has successfully implemented a refinancing of its existing £151
million debt facility and immediately deployed the majority of the net
refinancing proceeds into a number of highly attractive acquisitions:

·    Refinancing of existing £100 million term loan and £51 million
revolving credit facility with a £140 million term loan and a £50 million
revolving credit facility

·    Attractive fixed rate of 4.48% until August 2025 and 4.98% until
maturity in 2027

·    Deployed the net proceeds of the refinancing into four high quality
assets for a total purchase price of £42.2 million at a blended NIY of 6.6%

·    Spread between acquisition NIY and cost of debt provides immediate
EPS accretion

·    Potential for further income and total return enhancement through
identified asset management initiatives

·    Small increase in pro forma LTV to 32.6% leaving the company modestly
geared and with the benefit of 100% fixed rate or hedged facilities

 

Richard Moffitt, of Urban Logistics, commented:

"At our full year results announcement in June, we flagged an arbitrage
emerging between debt rates and asset pricing in our pipeline of
opportunities. We have been able to deploy additional capital into the
acquisition of carefully selected buildings at very attractive initial yields.
The properties also provide the potential for active asset management
opportunities to drive additional income and capital returns for our
shareholders.

"This activity supports the growth in our earnings, whilst still maintaining
our balance sheet discipline and low LTV. The refinancing provides strong
validation of our business from our lenders with our debt maturity extended
and our debt costs fixed at attractive rates.

"With a view to generating a strong total return for shareholders we are
actively seeking to sell selected assets where our asset management
initiatives have been completed and their sale will deliver an attractive
return on investment. We will be reinvesting that capital into assets that not
only provide a good income return but also provide asset management
opportunities and can therefore provide a meaningful contribution to total
return going forward. To that end we have a number of assets already under
offer and a strong pipeline of further potential acquisition opportunities."

 

Debt Refinance

Urban Logistics has refinanced the Company's existing secured bank facility,
which comprised a £100 million term loan and £51 million revolving credit
facility. At 31 March 2024, the term loan on this facility was £87 million
drawn at an ongoing rate of 4.99%.

 

The new facility comprises a £140 million term loan and a £50 million
revolving credit facility, and is provided by a club consisting of Barclays,
ING and Santander. The facility has a maturity of 3 years, sustainability
links, and two optional one-year extensions and a £100 million accordion
option, at the lender's discretion.

 

The facility is priced at a margin above SONIA of 1.75%, and is hedged through
to term. Existing hedges mean an interest rate of 4.48% until August 2025, and
from that date to term forward dated hedges fix the rate at 4.98%.

 

Following the refinance and acquisitions announced below, the Company has a
proforma net LTV of 32.6%, at the lower end of our medium-term target of
30-40%. The Company's debt facilities are 100% fixed or hedged through to
term.

 

EPS accretive Acquisitions

The additional debt has been used to acquire four assets purchased in
individual acquisitions for a total purchase price of £42.2 million at a
blended NIY of 6.6%, providing immediate EPS-accretion.

 

With a blended WAULT to first break of 4.1 years and a blended reversionary
yield of 7.1%, the assets provide a significant arbitrage to the debt costs
from day one, with opportunities to capture reversion and grow income as well
as capital values in the near term.

 

In total, the acquisitions will add more than 0.4 million sq ft of single-let,
last mile/last touch logistics real estate space to the Company's portfolio.
Further acquisitions are currently in advanced stages.

 

Asset acquisitions:

·    A 145,998 sq. ft. unit in Wolverhampton, acquired for £17.0m at an
NIY of 6.3%, let to Ibstock Bricks Limited for a term ending in 2033, with a
first break in 2028

·    A 130,676 sq. ft. unit in Doncaster, acquired for £11.7m at an NIY
of 7.1%, with a two year rent guarantee and immediate asset management
potential

·    A 108,897 sq. ft. unit in Peterlee, acquired for £8.3m at an NIY of
6.6%, let to Caterpillar Ltd for a term ending 2030, with a review in 2025

·    A 28,938 sq. ft. unit in Dartford, acquired for £5.2m at an NIY of
6.2%, let to Booker Ltd for a term ending in 2033, with a review in 2028

 

- Ends -

 

 Urban Logistics REIT plc

 Richard Moffitt                                                        +44 (0)20 7591 1600

 Buchanan - PR Adviser                                                  +44 (0)20 7466 5000

 Helen Tarbet                                                           +44 (0) 7872 604453

 Simon Compton                                                          +44 (0) 7979 497324

 George Beale                                                           +44 (0) 7450 295099

 Singer Capital Markets                                                 +44 (0)20 7496 3000

 James Maxwell / Alaina Wong / Oliver Platts (Investment Banking)

 Alan Geeves / James Waterlow / Sam Greatrex / William Gumpel (Sales)
 Panmure Liberum                                                        +44 (0)20 7886 2500

 David Watkins / Emma Earl
 Berenberg - Joint Broker                                               +44 (0)20 3207 7800

 Richard Bootle / Matthew Armitt / Patrick Dolaghan
 G10 Capital Limited (part of IQ EQ) - AIFM                             +44 (0)20 397 5450

 Graham Fetcher

 

About Urban Logistics REIT

Urban Logistics REIT plc (LON: SHED) is a FTSE 250 property investment
company. The Company is the only London listed REIT offering exposure to the
specialist last mile / last touch logistics sector, with a single-let tenant
base which delivers essential goods within the UK. The Company's strategy is
to invest in mid-sized logistics properties with the objective of generating
attractive dividends and capital returns through active asset management and
asset recycling to generate significant valuation uplift.

Urban Logistics' investment adviser team has significant experience in
investing in the fast-growing logistics sub-sector within the broader real
estate market. The team's ability to source important and strategically
located mid-sized single let properties, with high-quality tenants, off-market
at favourable terms, creates considerable value for shareholders. Tenants
include Amazon, XPO, DHL, Evri, DPD, Unipart (for NHS), Royal Mail and J
Sainsbury Plc.

Buying well and pursuing additional value enhancing asset management
initiatives has driven the Company's growth, enabling Urban Logistics to grow
from a £10m market cap company at IPO in April 2016 to a FTSE 250 constituent
with a portfolio valued at circa £1bn.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDEAXNKFSALEFA