Urban Logistics has refinanced its existing £151m debt facility and acquired four logistics assets in separate transactions for £42.2m.
The REIT has refinanced its existing £100m term loan and £51m revolving credit facility (RCF) with a £140m term loan and a £50m RCF at a fixed rate of 4.48% until August 2025 and 4.98% until maturity in 2027.
It has used the additional debt to acquire four warehouses providing 400,000 sq ft for a total purchase price of £42.2m at a blended net initial yield of 6.6%.
The assets include a 145,998 sq ft warehouse in Wolverhampton acquired for £17m and a 130,676 sq ft unit in Doncaster purchased for £11.7m.
The four assets have a blended WAULT to first break of 4.1 years and a blended reversionary yield of 7.1%, and provide opportunities to capture reversion and grow income as well as capital values in the near term.
Richard Moffitt, from Urban Logistics, said: “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.”
