TIDMPILR
RNS Number : 2514A
Pacific Industrial & Log REIT PLC
22 December 2017
Pacific Industrial & Logistics REIT plc
("Pacific Industrial & Logistics" or the "Company")
Portfolio acquisition, asset acquisition and declaration of
interim dividend
Portfolio Acquisition
Pacific Industrial & Logistics, (AIM: PILR), the specialist
UK industrial and logistics REIT, has completed the off-market
acquisition of a portfolio of six logistics assets from Oxenwood
YPL Limited for a total consideration of GBP31.5m. The purchase
price represents a net initial yield of 7.1%.
The acquired portfolio is in line with the Company's investment
policy of focusing on well-located single-let assets across the UK
close to established regional transport hubs in urban or last-mile
locations where there is strong occupier demand. Current occupiers
of the portfolio include DHL, which has let three of the sites. One
of the sites, located in Leigh, is newly refurbished and currently
void but comes with a year's rental guarantee and with interest
from several potential occupiers.
The acquisition price reflects an average capital value of GBP81
per sq. ft. which is well below replacement cost. The portfolio has
an attractive 7.1% net initial yield, low average warehouse rents
of GBP4.46 per sq. ft., reflecting significant reversionary
potential, and a weighted average unexpired lease term of 5.4
years. The sites average 65,204 sq. ft. in size.
Asset Acquisition
The Company has also completed the acquisition of a site in
Northampton for GBP3.0m at a net initial yield of 6.4%.
The site located at Moulton Park, Northampton is well located
close to the A43. It is a 43,694 sq. ft. logistics unit let to
Panther Logistics. The unit is let on a five-year lease through to
August 2022 and the rent is GBP4.75 per sq. ft.
Company Portfolio
Proceeds from the August 2017 placing have now been fully
invested and the capital returned from the sale of a site located
in Bedford, announced on 17 November 2017, reinvested.
The acquisitions bring the total value of the Company's
portfolio to GBP125m based on combining the acquisitions with the
Leeds site purchased in November 2017 and the Company's existing
assets at their 30 September 2017 valuation. Following completion
of the Acquisitions, the loan-to-value across the Company's
portfolio is 39%.
Funding
The acquisitions have been financed with the remaining proceeds
of the August 2017 placing, sales proceeds of Hammond Road, Bedford
and from the Company's existing debt facility with Santander. The
Leeds site purchased in November has also been refinanced. This
facility has now been extended to a five-year term at a margin of
210bps. The Company has fixed 70% of the drawn balance for five
years, representing an all-in cost to Shareholders of c.3.3%.
The Company remains ambitious to build a bigger business and,
with a strong pipeline of opportunities, continues to discuss
potential additional equity and debt financing for further
acquisitions.
Special Interim Dividend
On 17 November 2017, the Company announced the sale of a
property located at Hammond Road, Bedford for a consideration of
GBP5.8m. The disposal consideration reflected a profit of GBP2.2m
on the asset's acquisition price, and an IRR of approximately
43%.
Subsequent to the disposal, the Company has now reinvested a
substantial amount of the capital which was initially invested in
Hammond Road and, given the attractions of income to its underlying
shareholder base, has assessed the potential to return an element
of the disposal profit to shareholders by way of a special interim
dividend. In making this assessment, the Company is seeking to
balance, on one hand, the future requirements of growing the
business and, on the other hand, the potential to mitigate the
impact on dividends arising from the investment period following
the capital raise.
The Company is today declaring an interim dividend of 2.10 pence
per share. This dividend, which totals GBP1.4m in aggregate, is
being paid out of part of the profits of the sale of the Hammond
Road asset. The dividend will be paid to shareholders as a Property
Income Distribution, with a record date of 5 January 2018 and an
ex-dividend date of 4 January 2018.
The interim dividend of 2.10 pence per share will take the total
dividend paid or declared to date in respect of the financial year
to 31 March 2018 to 3.33 pence per share. The Company has now paid
or declared a total of 6.33 pence per share during the 2017
calendar year by way of dividend reflecting the strong cashflow
characteristics of its portfolio.
- Ends -
For further information contact:
Pacific Industrial &
Logistics REIT plc
Richard Moffitt +44 (0)20 7591 1600
Canaccord Genuity - Nominated
Adviser and Joint Financial
Adviser
Simon Bridges
Charlie Foster +44 (0)20 7523 8000
Montfort - Financial
PR and IR adviser
Nick Miles
Olly Scott +44 (0)78 1234 5205
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
About Pacific Industrial & Logistics REIT
Pacific Industrial & Logistics REIT plc is a property
investment company, quoted on the AIM market of the London Stock
Exchange, (AIM: PILR).
The Company has been established to invest in UK based
industrial and logistics properties with the objective of
generating attractive dividends and capital returns for its
shareholders. Its investment strategy focuses on strategically
located smaller single let industrial and logistics properties
servicing high-quality tenants. Investment returns will be
generated by an experienced management team focusing on quality
stock selection and active asset management.
A number of structural and commercial factors currently support
the attractive opportunity in the last mile/regional industrial and
logistics real estate sub-sectors targeted by the Company,
including: strong occupier demand, (driven by the growth of
e-commerce and investment by retailers in their associated supply
chain) and a decline in the supply of lettable space in industrial
and logistics real estate across the UK (being more than one third
lower than the most recent peak of 2009).
Acquisitions are targeted in the 6.5-7.5% net initial yield
bracket, (with affordable underlying rents in the region of
GBP4.50-GBP5.50 per sq ft.), on an overall LTV of 35-40% and a
significant margin over financing costs, thus presenting attractive
income, capital growth and total return opportunities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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