Industrials Reit, formerly Stenprop, says it seen four-consecutive quarters of rental uplift above 20% on renewal or new letting, underscoring how multi-let industrial (MLI) assets are benefiting from the growing importance of ecommerce.
Industrial, which has been selling off assets in mainland Europe to focus on the UK, said profit from continuing operations surged 268% to £42.6m (R906.1m) in its six months to end-September, when net rental income grew 45.2% to £15.1m.
The company is seeking to become a specialist UK-focused group that provides work spaces for small and medium businesses, or MLI estates, and it expects to be a pure MLI play by the end of March 2022
MLI assets in the UK have fared well in spite of Covid-19 and issues such as Brexit, with Covid-19 driving demand for warehousing space and giving a boost to e-commerce.
Supply remains constrained due to older stock being redeveloped for other uses, such as residential, Industrial said, whilst new supply is either not commercially viable at current rental levels or not possible due to a lack of available land in densely populated locations.
Industrials said it was pleased to report a group rent collection rate of 94% since April 2020, when Covid-19 took hold, and MLI collections were now ahead of its 95% target, demonstrating the resilience of its customer base.
“Over the course of the first half we have seen consistently high occupier demand for space in our multi let portfolio, right across the UK,” CEO Paul Arenson said in the results.
“We look forward to the second half with a high degree of confidence that these trends will continue,” he said.
The group has portfolio valued at £574m, encompassing 95 MLI estates in the UK with about 560,000m2 of lettable space. The group has one remaining holding in Germany, a portfolio of four care homes independently valued €38.9m (R703m).
In morning trade on Friday, Industrial’s shares were flat at R38.45, valuing it at R11.18bn.
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