Stenprop shares rise on JSE after acquisition
By Philippa Larkin
JOHANNESBURG – Stenprop leapt nearly 4 percent in early trade on the JSE on Tuesday after the property group said it had acquired two MLI properties for £11.1 million (about R237m) as it continued to pursue its goal to become a 100 percent UK multi-let industrial business.
The company said the properties comprised 18 high-quality units, in Glasgow, Scotland, and Stoke-on-Trent, England.
It said they were purchased in separate transactions, with a blended net initial yield of 6.5 percent.
Stenprop shares rose to a high of R25.94 in intraday trade. The group said it had made five acquisitions of MLI property valued at £39.95m since the start of Covid-19.
The group said the MLI totalled 1 343 units on 75 estates, representing 61 percent of its portfolio, based on asset values at March 31 this year.
Will Lutton, the head of Investment at Stenprop, said: “Despite the ongoing macro economic uncertainty, these two latest acquisitions demonstrate our ability to source attractive investment opportunities, both on and off market, in locations underpinned by favourable demand supply dynamics.
“Leveraging our local market expertise and strong relationships, the well-let assets enhance the existing portfolio, whilst also offering reversionary potential that will be realised via our proprietary industrials.co.uk platform.”
The Excelsior Industrial Estate, on the south-west side of Glasgow, was acquired for £5.2m from CBRE GI. Stenprop said the property was acquired in a market characterised by a shortage of stock, which was underpinning vacancy rates below 5 percent.
Comprising 10 modern units, the estate generated a total annual passing rent of £350 133.
Stenprop also purchased Tunstall Trade Park in Tunstall, just outside Stoke-on-Trent, a high quality, modern property of eight units totalling 56 500 square feet for £5.9m, from Clowes Developments.
The asset had a passing rent of £392 541, or average of rent of £6.95 per square feet.
Julian Carey, the managing director of Stenprop, said: “Passing five million square feet of MLI is a major milestone for Stenprop.
“Having made the strategic decision to transition the portfolio towards 100 percent UK MLI based on our belief that structural changes taking place in the UK would underpin warehouse occupier demand, we remain steadfast in our belief in the sector’s future prospects and our ability to translate this into attractive shareholder returns.”
Stenprop said the percentage of MLI assets within the portfolio was expected to rise from 61 to 63 percent following completion of the sale of the Neucoelln Carrée retail park in Berlin in January.
Its shares closed 1.20 percent higher at R25.30 on the JSE on Tuesday.