Urban Logistics Reit Share Discussion Threads

[scruff1] 25/4/2022 08:49

Picked a bad day to release that. Im thinking it may be a good day to pick up a few more. Unsure

[skinny] 25/4/2022 07:05

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Further GBP45m deployed with significant asset management potential

Urban Logistics (LON: SHED), the last mile logistics focused REIT, is pleased to announce an update for the period from 1(st) October 2021 to 31(st) March 2022. The Company will report its annual results on 23(rd) June 2022.

Highlights:

-- Deployment of a further GBP45 million of capital at a blended NIY of 6.7% since the announcement of 28(th) March 2022

-- Total deployment since the December 2021 fundraise now stands at GBP184 million, at a blended NIY of 5.4%

-- 5 new lettings, 3 rent reviews and 2 lease regears agreed in the period, covering 630,000 sq. ft. of space

-- Rent reviews and regears settled at a blended 13% increase over passing rent
Richard Moffitt, Chief Executive, commented:

"Our portfolio continues to grow at a substantial pace, having completed 14 transactions since our December 2021 equity raise. As we look ahead, we are optimistic that we can continue to source attractive value accretive acquisitions that are strategically positioned in current and emerging logistics hubs.

With these latest acquisitions, our blended NIY on all completed transactions since our fund raise in December 2021 is 5.4%, exactly as targeted during the raise.

East Midlands Logistics Hub (EMLH) near Melton Mowbray sits very well with some of our recent acquisitions, as it provides balance to our portfolio in terms of long income and short term asset management opportunity and we are already talking to occupiers about letting the campus location for fast moving consumer goods. We look forward to completing further acquisitions in the coming weeks and months and are on track to be fully-deployed on a geared basis by the end of June."

Acquisitions:

East Midlands Logistics Hub

-- GBP40.7 million logistics asset acquired at a NIY of 6.8%, with strong reversionary potential and immediate asset management opportunities

-- The property consists of a 72 acre site with four high quality units, substantial yard space and land with the potential for a further 175,000 sq. ft. of development

-- Located close to the A1 and A46/M1, it will benefit from planned local infrastructure improvements

-- Three large units totalling 665,527 sq. ft. let to Asfordby Storage and Haulage on a short term lease, with remaining unit (6,773 sq. ft.) let to Royal Mail

Lincoln

-- GBP4.2 million logistics asset on Outer Circle Road, Lincoln, acquired at a NIY of 5.8%
-- The property consists of a 25,924 sq. ft. unit on a 2 acre site
-- Let to Wickes Building Supplies Limited for a term of 10 years
Notable lease events in the period:

-- An agreement for lease has been signed with Master Removers Ltd for 120,218 sq. ft. of space in a new development in Golborne, Warrington. The building is a new brownfield development, and is expected to complete in October 2022. The lease is at GBP7.75 psf for a term of 15 years

-- A rent review has been settled with DHL Supply Chain on a unit of 31,410 sq. ft. in Norwich. The rent has been agreed at GBP181,250, representing a 29% increase from the previous level

-- A lease with the Unipart Group on a 122,478 sq. ft. asset in Runcorn, resulting in a new rent of GBP693,500, representing a 20% increase from the previous level

[dhoult12] 05/4/2022 12:54

Looking good. Still hoping they switch to qrly divis

[skinny] 05/4/2022 10:20

A new ATH @198.50p

[rik shaw] 28/3/2022 07:48

4 new acquisitions

[scruff1] 08/3/2022 21:51

lefrene
Tend to agree. The current problems are not conducive to happy invetors in retail - or much else - apart from maybe Dignitas :-)

[lefrene] 08/3/2022 13:10

scuff1, it's probably not company specific, just perhaps closing positions that ere held with borrowed money, and moving into commodities? I like the business model here, but if we are heading into a slump then retail purchases will reduce and along with it less demand for last mile distribution. Just a guess.


Also current events provide an excellent excuse to raise the prices of everything and especially interest rates. Since the huge off the scale (unmentioned by MSM) event of 17-9-19, there's been a desperate need to get things back to normal. Now they can crash the housing markets, and gets rates back to a more normal 5% to 7% range. The Ukraine thing is as convenient as the so called pandemic. Both of course with ghastly consequences, but bankers simply don't care, the sheeple are disposable.

[scruff1] 08/3/2022 12:55

Bit uncalled for. Typical. On a day when most of my stocks are in upward mode. Apart from the general malaise is there any reason for the drop that anyone knows of?

[jonwig] 19/2/2022 08:49

Thanks. Our hosts do not approve of links to "competitor" websites, so they cancel them.

[trekker60] 19/2/2022 08:42

The link which should have been in my previous post has disappeared so I've cut and pasted the article here:

Blackstone, Maersk, Casino and Ocado all focus on last-mile property
February 17, 2022

The ‘last-mileR17; property segment of the logistics market continues to see intense activity.
On Tuesday (15/2) the private equity fund Blackstone announced its was recapitalising its ‘pan-European last mile logistics company’ Mileway, which owns a complex of fulfilment properties around Europe. Calling it the “largest private real estate transaction ever” Blackstone and some of its partners will bring the capital value of the company up to €21bn, although Blackstone did not state how much cash will be pumped into the company to achieve this. Mileway certainly is large, owning 14.7m sq m of “last mile logistics assets” in 1,700 locations across ten countries in Europe. Blackstone’s James Seppala, Head of Real Estate Europe, stated that that “logistics is one of our highest conviction themes globally and the sector continues to prove its resiliency and strong growth potential”.
And Blackstone is not alone in its investment focus. Maersk’s newest $1.1bn acquisition is Pilot Freight Services which describes itself as a “North American facilities-based transportation network of 87 stations and hubs through which freight is transported and distributed to end customers”. Outsourcing much of its transport requirement, Pilot is focussed on property as its key asset base to compete in the last-mile sector.
The reason for this burst of activity is illustrated by the most recent news from the French retailer Groupe Casino and the logistics technology provider, Ocado. Announcing a new joint venture to build more automated customer fulfilment centres, the two companies said that they perceived a “significant and growing demand for online grocery services across the French market, creating a huge opportunity to leverage their combined expertise, including Ocado’s UK experience providing multi-retailer CFCs”. Note that Casino referred to “multi-retailer CFCs”, so it seems both these companies ambition extends beyond Casino’s luxury food market.
Of course, up until now Ocado’s CFC technology has been focussed on creating large dedicated fulfilment centres, but Ocado is rethinking its approach, articulating what it calls “Ocado Re:Imagined”, which seeks to adapt its technology to “faster through more cost-effective, simpler, more flexible buildings, with a faster time to go live”. This implies that the types of logistics property used for fulfilment in the future will be smaller, more localised and less dedicated facilities, which is something that Amazon has been trying to achieve for a couple of years now, but with greater opportunity for automation. The result is likely to be a new burst of change in the logistics property market as property developers scrabble to deliver such locations to retailers and their logistics suppliers.
Source: Transport Intelligence, 17 February 2022
Author: Thomas Cullen

[trekker60] 19/2/2022 08:37

This article may be of interest to Urban Logistics investors:

[...]

[km18] 08/2/2022 15:00

Urban Logistics REIT (SHED), the last mile logistics focused REIT, issued a trading update on recent activity following its move to the Main Market and £250 million equity raise in December 2021. £39.5 million of logistics assets have recently been acquired at a blended NIY (net initial yield) of 5.0%. In aggregate £68.1m of capital has been deployed or committed since the December equity raise and the Group portfolio now consists of 110 strategically positioned last mile/last touch urban logistics assets. A £9 million asset disposal has been completed which has generated an IRR of c. 25% and 100% of prior quarter rent demanded has been collected.
SHED has momentum, has top quartile ranked profitability ratios and a history of solid growth. But valuation and dividend yield are average for the sector. It is a solid real estate investment and unique - the only listed REIT to focus on specialist last mile / last touch logistics assets, with a tenant base which delivers essential goods within the UK. Certainly in an interesting area of the market with a decent investment case and one to monitor at the very least....from WealthOracleAM

[jonwig] 08/2/2022 08:14

Those new purchase yields don't look 'top-of-the-market', though we aren't told of any inflation linking. These days, that's important.

[skinny] 08/2/2022 07:02

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Urban Logistics (LON: SHED), the last mile logistics focused REIT, provides a further update on recent activity following its move to the Main Market and GBP250 million equity raise in December 2021.

Key points

-- GBP39.5 million of logistics assets recently acquired at a blended NIY of 5.0%
-- In aggregate GBP68.1m of capital deployed or committed since the December raise
-- Group portfolio now consists of 110 strategically positioned last mile/last touch urban logistics assets

-- GBP9 million asset disposal which has generated an IRR of c. 25%
-- GBP40 million Aviva Investors debt draw down completed with interest only payments on a fixed rate of 2.26% in a 7 year term facility

-- 100% of prior quarter rent demanded has been collected
Richard Moffitt, Chief Executive, commented:

"I'm pleased to be able to announce a good package of acquisitions which provides a mix of long term stable income and near term asset management opportunities, a further disposal at an attractive return and an additional GBP40 million green debt with Aviva Investors.

"We have grown into a major player in last mile / last touch urban logistics, and our continued focus on pipeline assembly and execution has put us in a position to complete 11 properties since our December equity raise. We remain focused on well let, strategically positioned assets in existing and emerging logistics hubs. Looking ahead, we are confident that we can continue to find attractive yield spreads on acquisitions with asset management opportunities.

"We welcome the development of our relationship with Aviva Investors, a key financing partner. The new debt comes with specific ESG clauses, as we seek to continue to build our sustainability credentials in line with the commitments we have made to investors."

Acquisitions

Ashville Way, Oxford

A 21,650 sq. ft. warehouse at Ashville Way, Oxford. The purchase price paid was GBP3,920,000 at a NIY of 5.7%. The unit is let to Mayfield Press (Oxford) Ltd until October 2031.

Sabre Way, Peterborough

An industrial unit of 56,385 sq. ft. in Sabre Way, Peterborough. The purchase price was GBP5,250,000 at a NIY of 5.8%. The site is let to Malco Holdings Ltd until August 2027.

The Triangle portfolio

The Company has completed a transaction with a single vendor to acquire three assets for a purchase price of GBP9,175,000 at a NIY of 4.9%. The portfolio is fully let and benefits from near term contractually committed rental improvements to bring the yield to 5.8% within the calendar year 2022:

-- Communications House, Norwich: A 42,172 sq ft warehouse let to Ingram Micro Services Ltd until December 2028

-- Burdon Drive, Peterlee: A 69,178 sq ft warehouse let to Saica Pack Ltd until June 2026
-- Rosevale Road, Newcastle Under Lyme: A 55,588 sq ft warehouse let to Diebold Nixdorf until July 2031

Nene House and Logistics House, Daventry

A site in Daventry, comprising two logistics units totalling 159,699 sq ft let to Ceva Logistics until September 2027, a self-contained warehouse comprising 8,147 sq ft let to Futures Homeway Ltd until January 2026 and a 23,256 sq ft multi let office building. The purchase price paid was GBP21,200,000 at a NIY of 4.8%, with short term asset management opportunities to bring it up to 5.5%.

Disposal

Following agreement of a new long lease, the Company has disposed of a 93,928 sq ft industrial warehouse, let to G Plan Upholstery until March 2036. The disposal was for gross proceeds of GBP9,000,000, representing a 10.4% uplift of net book value and a 35% gross uplift on acquisition cost. The exit NIY was 4.9% and an IRR of c. 25% has been generated. This continues the Company's strategy of selective, targeted recycling of capital into new opportunities.

Debt Update

On 12 March 2021 Urban Logistics entered into a new 7 year GBP48 million loan facility with Aviva Investors.

Urban Logistics has now signed a further GBP40m interest-only facility provided at a fixed rate of 2.26% pa. The facility includes, inter alia, margin rate improvement available on hitting environmental targets across the assets charged. The facility with Aviva Investors is secured across a portfolio of 13 logistics assets totalling 1.2m sq ft. over a 7 year term.

- Ends -

[wednesday6] 21/12/2021 09:25

Thankyou, i will call my broker.
After a lenghy conversation with lloyds it happens by chance that they are about to be credited. To my account later today, chances of that eh....

[scruff1] 21/12/2021 09:20

You need to contact them. There is something wrong there. (mine were in straight away)
Way too long

[wednesday6] 21/12/2021 09:11

Is anyone else who bought shares via primary bid still waiting for them to be credited to their share dealing account? Expected to see them by now.

[sf5] 20/12/2021 10:16

Already deploying over 10% of the recent fundraise

[jbarcroftr] 08/12/2021 11:29

Agreed sinzu and trekker

[sinzu] 08/12/2021 11:18

Barring a full blooded economic recession, surely the fundamentals are rock solid and the demand for last mile logistics properties is very unlikely to diminish in the foreseeable future.

[trekker60] 08/12/2021 10:38

Good to be on a Chat board where there is reasoned argument/debate and valid contrary views expressed - so thanks nimbo1, jonwig, maiken and others. Too many boards these days are just ramping/deramping/slanging match forums!
FWIW, I originally bought into these some time ago as primarily an income stock - the yield then was about 6% - with any capital growth a bonus. I've subsequently topped up with a few more at higher prices/lower yields in a couple of the company fund-raising offers but my thinking basically remains the same. So am happy to hold and keep taking the dividends.

[nimbo1] 08/12/2021 10:00

Hi Jonwig, thanks you might be right on the discount front. Anyway I hold some shed and I've aired my reservations so will be quiet now. I started working in commercial property in 2009, which was interesting! So I suspect we have similar experiences on what happens when things in the sector reverse.

[jonwig] 08/12/2021 09:36

OK, nimbo. So far as I know there is just one quoted commercial propco which follows your preferred model, Highcroft (HCFT). It has 30% gearing and buys properties only on sale of others. The key thing is that its NAV discount is around 30%! And it's been stuck there for years.

The term "dilution" has been used, and it has more than one meaning. The general definition is share of voting rights. If you hold 10% of a company, you need to take 10% of any fundraise to avoid this dilution. I don't think that's a major factor for PIs investing their limited funds.

More common is dilution of earnings. When a propco raises new cash, it earns nothing for maybe up to a year so the property income is spread over more shares and hence reduced. But this is temporary, as the cash is invested, so the earnings blend in.

There is a potential downside: in a property crash, assets lose value and the shares lose more value and move to a discount. They can't raise more equity or, usually, borrow more. Don't tell me that won't happen: if you were an investor in 2007-10 you'll know it can. (And 1974 was a lot worse - I'd just started investing then.)