CAPE TOWN - Atlantic Leaf Properties, the UK-based Real Estate Investment Trust (REIT) announced a GBP9 million acquisition of a new industrial property in Denby, UK, on Monday.
It was Atlantic Leaf’s fifth acquisition of industrial property in three months. Atlantic Leaf had fully redeployed the proceeds from the disposal of its investment in the retail warehouse sector earlier in the year, the JSE and Mauritius-listed company said.
Its industrial exposure had increased by value to 79 percent, up from 70 percent at the 2019 year-end.
“We are pleased to have completed the transaction on this new distribution warehouse at an attractive net initial yield of 6.35 percent on a strong long-term lease” said CEO Paul Leaf-Wright.
He said the industrial and distribution warehouse sector in the UK was benefiting from the growth in rentals and general demand driven by increasing volumes in e-commerce and logistics.
For the financial year to date, the group had secured GDB40 million investment in a mix of five new and existing industrial properties at a blended initial yield of 6.7 percent.
In line with the company’s gearing policy, a new 3-year credit facility from Lloyds Bank had been secured, and the debt was fixed at a rate of 2.5 percent.
Financial Director Mark Pryce said the accommodative swap rates in the market alllowed them to fix the cost of the new debt at rates lower than the weighted cost of existing debt.
“Atlantic Leaf is fully invested in properties with long-term leases in place. We also have debt that only matures on average in 3-4 years. We believe the combination of these should see us through the period of uncertainty being created by Brexit,” Leaf-Wright said.