Warehouse REIT, the specialist warehouse investor, has exchanged contracts to acquire two separate assets, one in Stone, Staffordshire and the other in Carlisle, and completed on a site acquisition in Banbury, Oxfordshire. The aggregate purchase price for the three transactions is £5.3 million.
The company also announces that, in line with the IPO prospectus, it has secured new and enlarged financing facilities totalling £65 million with HSBC, to be used to fund pipeline acquisitions.
At Stone Business Park, Warehouse REIT has acquired four industrial units on the Walton Industrial Estate, from a private investor, for £3.7 million, reflecting a net initial yield of 7.3%. Occupying a 5.5 acre site, the units total 57,500 sq ft, with average passing rents of just £5.09 psf. Fixed uplifts in one of the leases will increase the passing rent by 16% over the next four years.
Significant capital investment by the tenants, including e-commerce packager Woolcool and utility provider Capula, demonstrates their long-term commitment to the site, whilst the low site density of 24% offers medium-term opportunities to enhance the asset. Located on the A34, which provides quick access to the M6, the North West's main arterial route, other occupiers on the business park include Royal Mail, Aldi and XPO Logistics. The vendor was advised by B8 Real Estate.
At Carlisle, Warehouse REIT has acquired two multi-let trade counters, totalling 13,800 sq ft, from a private vendor, for £0.8 million, reflecting a net initial yield of 8.25%. The one acre property is situated adjacent to the Company's existing 12,000 sq ft holding.
The site occupies a prominent corner position at the intersection of two main roads, approximately one mile south of Carlisle city centre, providing the opportunity to merge the car parking with the adjacent unit to enhance access and circulation for tenants at both holdings. Currently let to two tenants at a historic rent of below £5 psf, the property offers significant reversionary potential, with unit 1 benefitting from a fixed 40% rental increase next year.
Finally, Warehouse REIT has completed the acquisition of a six-acre site in Banbury, Oxfordshire, occupied by Banbury FC, for £0.8 million. The site is located adjacent to the Company's existing c. 150,000 sq ft Tramway Industrial Estate, with the enlarged 13 acre strategic holding providing medium to long term mixed-use redevelopment options.
Following these transactions, Warehouse REIT has invested over £140 million in its pipeline of warehouse assets, including completing the four acquisitions totalling £26.25 million, announced on 25 September 2017.
Replacing £44.3 million of debt facilities which were secured against Warehouse REIT's initial seed portfolio from the same lender, the refinancing comprises an increased five year term loan facility of £30 million at a reduced interest rate of 2.25% above Libor and a new £35 million five year revolving credit facility at an interest rate of 2.4%, also above Libor.
Neil Kirton, Non-Executive Chairman of Warehouse REIT, commented said: "These new acquisitions fit with our investment strategy of acquiring assets that are either located in urban areas or on infrastructure links, and whilst they already offer a good income return they also present opportunities to leverage our asset managers' expertise to drive further value over the longer term.
Combined with our successful refinancing, today's news is a further example of the business delivering on its stated strategy as set out at the time of our listing in September 2017, and we look forward to working through our exciting pipeline of further opportunities and building our exposure to the fast-growing Tier 3 warehouse sector."