Stenprop’s decision to become multi-let industrial landlord will weaken its dividend in the short term, CEO Paul Arenson says.
The company has been disposing of its office assets and buying multi-let industrial properties as its management believes this is an attractive sector with long-term potential. These are assets that generally include 10 industrial tenants.
Stenprop, which released financial results for the six months to end-September on Thursday, declared an interim dividend of 3.375p per share, which represents a 15.625% fall compared with the six months to end-September 2017.
“Stenprop is transitioning from a diversified real estate investment trust into a multi-let industrial property owning company,” Arenson said, adding that as much as 27% of the company’s assets are industrial.
He said that by the end of the financial year to end-March 2019, 40% of its assets will include multi-let industrial properties.
Arenson said the company bought assets valued at £25m during the period under review and will buy another £75m worth by the end of the financial year.
In 2020, Stenprop plans to buy another £100m worth of assets, giving it 65% exposure to multi-let industrial assets.
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