Urban Logistics strong demand for space drives significant new lettings

Urban Logistics REIT

Urban Logistics REIT (LON:SHED), the last mile logistics focused REIT, has announced an update for the period from 1st April 2022 to 30th September 2022, ahead of the interim results which will be announced on 11th November 2022.


·    99% of rents due and demanded collected in the period

·    12 new lettings in the period covering 470,000 sq. ft. of space, generating £4.0m of additional rental income

·    9 rent reviews or re-gears in the period, generating an additional £0.6m of rental income

·    59% rental uplift across all 21 lease events for the period, on a like-for-like basis

·    40% of the portfolio with an EPC rating of A or B, and 86% with an EPC rating A-C, up from 27% A or B and 76% A-C in March 2022

·    Occupancy rate across the portfolio rising to 95% at period end, with 5 further leases either let post period end or in solicitors’ hands.

·    Recent deployment of a further £3.3m of capital, bringing the total deployed in the period to £112m, at a blended NIY of 4.8%

·    £122m of debt drawn in the period with Aviva Investors, fixed for 10 years at a cost of 3.8%, bringing total debt to £310m, of which 97% is hedged or fixed, and has a blended cost of 3.3% and a weighted average term of 6.4 years

·    Built additional flexibility into our debt facilities during the period, allowing the Company to draw a further £51m on demand at a marginal rate of 3.5%, with a term until 2025

Richard Moffitt, Urban Logistics Chief Executive, commented:

“In the first half of the year we have continued to demonstrate how we can drive value throughout the property cycle, achieving a 59% like-for-like increase in rental rates. Our approach enables the business to thrive across market cycles due to our core strategy of acquiring mid-box, single-let logistics properties with significant asset management potential.

“Lettings have been strong across the portfolio, as we see a robust occupational market with high demand and low vacancies. In particular, we’re very pleased that our new development at Blenheim Park has let so quickly, with the final unit expected to be let shortly, and providing an expected 6.6% yield on cost across the project. Our new lease at Brent Road, Southall, shows the rapid implementation of our asset management plans following acquisition.

“We also have been working hard to demonstrate our commitment to our ESG agenda and goals, which can be seen at the recently completed development at Blenheim Park, where all buildings have an EPC of A  and very good BREEAM ratings.

“Looking to the future, we see the potential for continued capital market turbulence, but are reassured by the continuing demand in the occupational market for our asset class. We remain well placed with our largely fixed debt cost, low LTV, and immediately available debt facilities at an attractive cost, to acquire assets when the time is right. Our strategy will continue to be based on value creation through active asset management, leaving us well-positioned in a volatile market.”


The Company has recently acquired a 39,899 sq. ft. industrial warehouse on the Westfield Industrial Estate in Cumbernauld, Glasgow. The purchase price paid was £3,346,362 at a NIY of 7.0%. The unit is let to Pitreavie Packaging Limited on a lease expiring in 2032.

In total, the Company completed thirteen acquisitions in the period, totalling £112m at a blended NIY of 4.8%, with £296m deployed across 23 transactions since the December 2021 equity raise, at a blended NIY of 5.2%.

New lettings

Notable new lettings in the year include:

Brent Road, Southall

A new lease has been granted to Delice de France Ltd for the 97,362 sq. ft. chilled warehouse in west London. The rental income is £1,960,000, a 122% increase on the passing rent at acquisition in August 2022, and the lease length is 25 years.

Blenheim Park Development, Nottingham

Blenheim Park is a development which was undertaken by the company in 2021, consisting of 4 units. The development has now completed, and 3 of the 4 units have been let, with the outstanding unit expected to be let shortly. All units have an EPC of A.

·    A new lease has been granted to Cotton On Ltd for the 81,301 sq ft unit. The rental income is £567,000 and the term is 10 years

·    A new lease has been granted to More Years for the 24,258 sq ft unit. The rental income is £181,051 and the term is 10 years

·    A new lease has been granted to All Shires Foods Ltd for the 18,166 sq ft unit. The rental income is £131,152 and the term is 10 years

Exeter Gateway

A new lease has been granted to Forgeway Ltd for the 29,082 sq. ft. unit developed for the Company at the Exeter Gateway site, which completed in the period. The rental income is £267,279, and the lease length is 15 years.

Edison Road, Bedford

A new lease has been granted to UK Power Networks Limited on the 24,380 sq ft warehouse near Bedford, following a major refurbishment. As part of the refurbishment, solar cells were installed on the roof and electric vehicle charge points were installed and the EPC was improved from an E to an A. The rental income is £220,158, and the lease length is 10 years.

Interim Results Presentation

Management will be hosting a virtual presentation for research and sales teams at 9:30am on 11th November 2022. If you would like to attend the presentation, please contact urbanlogistics@buchanan.uk.com

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