Warehouse REIT has completed four long-term lettings totalling 121,400 sq ft. The deals increase the REIT’s portfolio occupancy to 93.3% from 92.7% (as at 30 September 2022) and increase the portfolio’s WAULT to 5.7 years from 5.4 years (as at 30 September 2022).
At Valley Point, Rugby (pictured), Warehouse REIT has agreed a 20-year lease with no break on 38,600 sq ft to PWR Europe, a developer and manufacturer of cooling solutions. The lease will generate a contracted rent of £332,400 per annum, equating to circa £8.60/sq ft, 11% above the 31 March 2022 ERV. It is subject to five yearly upward only rent reviews to the higher of open market rent or indexation.
In Milton Keynes, the REIT has agreed a 10-year lease with no break to motorbike retailer Superbike Factory on the 20,200 sq ft Unit 1 at Granby Trade Park. The lease will generate a contracted rent of £201,800 per annum, equating to £10/sq ft, 6.6% ahead of the 31 March 2022 ERV. The building recently underwent a comprehensive refurbishment programme which improved the building’s EPC rating from a D to a B.
Warehouse REIT has also secured a deal with an unnamed manufacturing business at Unit 3, Carisbrooke Industrial Estate, Isle of Wight, for a headline rent of £185,000 per annum for 10 years with a break at five years, equivalent to £5.12/sq ft, 7.7% ahead of the 31 March 2022 ERV.
And at Shaw Lane, Doncaster, the REIT has leased an additional 5,000 sq ft unit to Turners Garage and extended the term on the company’s existing 21,000 sq ft unit. The combined new letting is on a 10-year lease with no breaks, removing the previous lease’s break at year five. The headline rent is £165,300 per annum, equating to £6.24/sq ft, a 4% uplift on the tenant’s previous lease rate per sq ft, or 21.4% ahead of the 31 March 2022 ERV on the new unit’s letting.
Paul Makin, investment director of Tilstone Partners, the investment advisor to Warehouse REIT, said: “As our continued strong leasing activity demonstrates, the UK warehouse occupier market remains in robust health, reflecting the breadth of tenant demand in a market beset by structural undersupply. Where rents remain affordable, particularly in the regions where the company’s portfolio is concentrated, there is no sign of this supply-demand imbalance easing.
“In particular, we are increasingly seeing properties with the highest sustainability credentials experiencing strong demand and potentially starting to command rental premiums, as businesses accelerate their own green agendas. The company has a near-term pipeline of similar value-add initiatives which will enhance the portfolio income profile whilst further reducing vacancy.”
