Warehouse REIT is selling its 1.8m sq ft Radway Green development in Crewe to further reduce the company’s debt.
The REIT started assembling the 102-acre site in 2017 and last year it entered into a development agreement with Panattoni to deliver 1.8m sq ft of logistics space with Warehouse REIT funding the scheme.
The REIT announced the news in its half-year results for the six months ended 30 September 2023. The results showed a 1.0% increase in its like-for-like portfolio valuation to £811.3m during the period, while its operating profit increased 1.5% to £17.3m. Yields were broadly flat with like-for-like growth in estimated rental values of 2.8%. The REIT said it expected ERV growth for the year of 5% to 6%.
Neil Kirton, chairman of Warehouse REIT, said: “In June we set out a plan to drive earnings by capturing portfolio reversion, selling non-core assets to reduce expensive debt and progressing Radway Green. We have made good progress. Our focus on multi-let industrials where demand is resilient and supply is tight has supported further leasing momentum; we have delivered asset sales significantly ahead of book value and strengthened the balance sheet with 88% of our debt now hedged.
“A consensus is emerging that interest rates will remain ‘higher for longer’ and we are managing our business accordingly. Key to this is delivering value for shareholders at Radway Green, which is a highly attractive development but not one we will undertake alone. We have therefore launched a process for a sale of the whole, or a majority, of the asset, which will enable the business to focus on what it does well – active asset management. This is also the most effective way to deliver sustainable earnings growth over the long term.”
