Industrials Reit on Friday said it had enjoyed another quarter of strong leasing in its UK-based multi-let industrial (MLI) portfolio.
In a trading update for the quarter to June 30, the London Stock Exchange and JSE listed REIT said average passing rent increased 27 percent on all new lettings and lease renewals, the highest growth rate achieved to date and the seventh successive quarter of above 20 percent average uplifts.
During the quarter, the average uplifts of 30 percent and 23 percent were achieved for renewals and new lettings, respectively. In the previous quarter, the figures were 16 percent on renewals, 34 percent on new lettings and 22 percent overall.
CEO Paul Arenson said: "Since the start of the first quarter in April, the MLI market has continued to be driven by the same high level of occupier demand as last year. Given the backdrop of negative headlines around inflation, rising interest rates and the threat of recession, the fact that our MLI space remains highly affordable to our customers and that demand for space continues to outstrip supply across the UK provides us with a great deal of comfort and confidence.”
He said they had also seen continued success with asset management initiatives.
“Further evolution in our Industrials Hive platform is also driving efficiency improvements in our marketing and leasing functions, particularly the speed at which we can re-let space, as well as enhance our customer service proposition,” said Arenson.
Two small MLI acquisitions were completed in the quarter, and a single-let asset in Reading was sold, releasing funds for further accretive multi-let industrial opportunities.
Loan-to-value was low at 26 percent. The UK commercial investment market was experiencing volatility as buyers took stock of rising interest rates and economic uncertainty. However, demand continued to outstrip supply, he said.
A further 11 lettings exchanged across 19 350 square feet (previous quarter: 17 lettings across 54 044 square feet) took the total number of leases exchanged or completed during the quarter to the second highest period on record at 326 576 square feet (previous quarter: 453 000 square feet).
Like-for-like passing rents across the portfolio grew 1.5 percent, tracking in line with target revenue growth of 4-6 percent per annum.
Occupancy across the MLI portfolio remained stable at 93.7 percent.
The number of Industrials.co.uk website users was up 7.8 percent over the year (previous quarter: 8.3 percent), which coincided with several user experience enhancements.
Eighty-seven percent of rents due in the quarter ended June 30, 2022, had been collected by July 26. Ninety-eight percent of rents due for the financial year ended March 31 2021, had been collected by July 26, 2022, equal to normal pre-Covid collection levels.