The value of Warehouse REIT’s portfolio fell 18.5% to £828.8m from £1,012.0m in the financial year to the end of March.
The REIT reported adjusted earnings of £19.8m (2022: £27.2m), primarily reflecting increased debt costs.
In the reporting period, Warehouse REIT received £45.3m in contracted rent and generated £3m from 40 new lettings – 29.1% ahead of previous contracted rent. The company also revealed it was in advanced negotiations for a 350,000 sq ft pre-let at the first phase of Radway 16 in Crewe.
Neil Kirton, chairman of Warehouse REIT, said: “This financial year saw a marked divergence between equity market valuations and the continued strength of the occupier market. Operationally, our performance has been strong; our focus on multi-let assets in key industrial hubs where demand remains firm but supply is constrained is paying off with like-for-like growth in contracted rents of 5.3%.
“We were not immune from the rapid rise in interest costs, which impacted both our valuation and our earnings, but we acted decisively, with £90m of non-core disposals in line with our plan, supporting the balance sheet and further focusing the business on its core assets.
“Since year end, there are clearer signs that investors are returning to the market, evidenced by activity across the sector and our most recent sales, which are ahead of book. At Radway, our flagship scheme in Crewe, we are now in advanced negotiations for a significant pre-let, a major milestone which validates our ambitious but highly disciplined approach to development. This opportunity, coupled with an improved financial position and our 71% weighting towards multi-let assets, the strongest part of our market, leaves us well positioned for the future.”
