Warehouse REIT, an AIM-listed company, investing in e-commerce urban and last-mile industrial warehouse assets in the UK, announced that it would raise up to £45.9m through the issue of up to 37,934,400 new ordinary shares at a price of 121p per share.
The proceeds will be used to help finance the acquisition of two distribution warehouses in Harlow for £13.9m and two further purpose built modern multi-let warehouse estates located in two separate premier UK business locations, which are currently under for a total of £43.5m.
The company said in a release announcing the raising, that it saw demand for warehouse space coming from an increasingly diversified occupier base, many of whom are businesses responding to structural changes in their markets driven by the growth in e-commerce, with the current COVID-19 pandemic accelerating this trend.
This diversified occupier base is competing for facilities in the best locations close to major conurbations and transport infrastructure. Warehouse REIT’s investment adviser, Tilstone Partners Limited, said they believed that modern purpose-built assets with these attributes will outperform wider rental growth forecasts.
It has been a busy year for the REIT and since July 2020, the trust has completed on £162m of acquisitions totalling 1.8m sq ft. The portfolio now totals approximately 7.9m sq ft.
Andrew Bird, Managing Director of Tilstone Partners Limited, commented, “We are seeing unprecedented demand for modern, fit-for purpose warehouse space in economically relevant locations, underpinned by e-commerce growth which has accelerated as businesses of all size look to adapt and future proof their operations… Despite increasing competition for exposure to what has been a standout performing asset class, a combination of our on the ground intelligence and deep relationships and a wide pool of motivated sellers has seen the company deploy the proceeds from last year’s capital raise on schedule and into highly attractive opportunities, offering both strong day one income and longer-term asset management opportunities.”
The industrial and warehouse sector has continued to outperform the UK property market with investors attracted by rental growth and secure income which is putting downward pressure on yields. According to the CBRE UK Monthly Index, industrial capital values increased by 6.1% in the three months to 31 December 2020, with rental growth of 1.5%.