Warehouse REIT has successfully executed the sale of two of its assets, amassing a total of £9.5 million, a figure that impressively sits 30% above the book value as of 31 March 2023. This notable accomplishment reflects an average net initial yield of 6% on the passing rents, highlighting a favourable market response.

This recent venture significantly bolsters the firm’s sales record, pushing the total sales to £39.6 million since 1 April 2023, and an impressive £94.3 million over the past year. This trajectory aligns well with Warehouse REIT’s ongoing commitment to capital recycling, signalling a positive trend in its financial manoeuvres. The proceeds generated from these sales are earmarked for debt reduction, a move poised to support the company’s earnings in the present financial year.

The assets disposed of include warehouses located in Carisbrooke on the Isle of Wight, fetching £3.1 million, and Newport Road, Cardiff, securing £6.4 million. The Carisbrooke and Cardiff assets had been a part of the portfolio for six and three years respectively. Significant enhancements had been made to these assets under Warehouse REIT’s management, leading to their reclassification as non-core, hence the decision to dispose of them.

Post these transactions, as of 30 September 2023, Warehouse REIT’s financial stance reflects a net debt of £276.0 million, with an LTV of approximately 35%, gauged on the 31 March 2023 valuation.

Simon Hope, the Co-Managing Director of Tilstone, an investment advisor to Warehouse REIT, voiced his contentment on the successful venture. He noted that these sales are a testament to the effective capital recycling strategy laid out by Warehouse REIT back in June. The substantial yield above the book value not only underscores the liquidity of well-let warehouse assets but also exemplifies Warehouse REIT’s adeptness in value creation and realisation for its shareholders, even amidst challenging macro-economic settings.

The premium garnered from these sales indeed sheds a positive light on Warehouse REIT’s asset management acumen and its capacity to navigate and capitalise on the current market conditions to the benefit of its stakeholders.