THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL APPLICABLE SECURITIES LAWS OR REGULATIONS.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION (EU) NO 596/2014 ("MAR"). UPON publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR.
Urban Logistics REIT plc
("Urban Logistics" or the "Company")
Pipeline Update and Potential Equity Raise
Urban Logistics, the last mile logistics focused REIT, announces an update on its proposed acquisition pipeline and a potential equity raise.
Focusing on smaller sized, single let properties Urban Logistics has built a high-quality portfolio of last mile urban logistics assets. Urban Logistics is the only company trading on the London Stock Exchange with such a focus. Last mile real estate around cities and towns is a growing part of the business infrastructure of the Company's tenant base, which is principally made up of third party logistics operators and businesses focusing on essentials and staples such as pharmaceuticals and food. Covid-19 has accelerated e-commerce activity and investment into supply chain capacity, leading to an increased requirement for last mile logistics real estate.
The Company offers an attractive dividend and the Board believes that with a valuation of under £70 per square foot1 and a low average passing rent of under £5 per square foot the current portfolio has the potential for further value uplift.
(1) When adjusted to 45% site cover and excludes development land.
Strong track record and current trading update
Over the period from IPO to 31 March 2020:
§ EPRA NAV per share increased by 37.9%, representing an average increase of 8.6% per annum;
§ the Company declared dividends totalling 27.15p per share; and
§ the Company achieved a cumulative total accounting return of 61.2%, equivalent to 13.4% per annum.
(Source: Pacific Capital Partners)
The Company benefits from an entrepreneurial and active management focus, with seven lease events completed in the 12 months to 31 March 2020 and 35 lease events completed in total since IPO. The Company's management has a proven track record of sourcing acquisitions, regularly in off-market transactions.
On 6 July 2020, the Company announced that 98% of rent due for the quarter to September had been collected, with the remaining 2% having now been collected. This follows a strong rent collection in March for the quarter to June when 100% of rents due were collected. The current levels of rent collection evidence the Company's proactive approach to strong covenants and intentional bias towards resilient sectors.
The weighted average net initial yield for all assets acquired by the Company since IPO to 27 August 2020 is c.6.7% with a weighted unexpired lease term of c.5.4 years and contracted rents as at 27 August 2020 (including short-term lettings and licences) was c.£20.0 million per annum (Source: Pacific Capital Partners (unaudited)). The average rent per square foot of the Company's portfolio as at 27 August 2020 was £4.83 and the valuation yield was c.5.8% (Source: Pacific Capital Partners, based on pro forma portfolio values as at 27 August 2020 (unaudited)).
Pipeline update and potential equity raise
In March 2020 the Company completed a £136 million equity raise, followed by arranging a £151 million debt facility (at a reduced all in cost of c.2.66%) replacing the £76 million facility previously in place. Since March 2020, Urban Logistics has completed nine acquisitions for a total consideration of £145.7 million (6.0% weighted NIY) and a further c.£28.7 million is currently being applied to Board approved transactions that are expected to be completed in the short term. The Company has therefore invested or committed to invest all of its funds currently available for acquisition.
As at the date of this announcement, the Company has identified a pipeline of logistics assets which meet the Company's investment criteria. The near term pipeline of potential acquisitions comprises assets with a consideration of c.£389 million across 33 assets with a weighted unexpired lease term of c.6.7 years, a current rent roll of c.£26.7 million per annum and with a weighted average net initial yield of c.6.43%. The Company believes that the net proceeds of a potential fundraise would be substantially invested within a three-month period following completion.
Urban Logistics has a stated strategy of growing the Company, delivering attractive income and capital returns to its shareholders. To that end, the Company is now considering an equity fundraising to enable it to capitalise on its strong pipeline and a very attractive investment environment and will now commence a period of engagement with existing and potential new investors.
The Company believes that the acquisition of the pipeline properties will be accretive to earnings and will further diversify the Company's income, in addition to continuing to strengthen the portfolio's quality, size and prospects for further growth.
Any equity fundraising would be conditional upon, amongst other things, the approval of shareholders passing the resolutions necessary to authorise the fundraising. The pipeline assets referred to are subject to ongoing negotiation and due diligence and no contractually binding obligations have been entered into. There can be no assurance that the Company will complete the acquisition of any of the pipeline properties on the expected terms or at all,
Further announcements and details regarding any potential equity fundraise will be made as and when appropriate.
- Ends -
For further information contact:
Urban Logistics REIT plc
+44 (0)20 7591 1600
+44 (0)78 1234 5205
N+1 Singer - Nominated Adviser and Joint Broker
James Maxwell / James Moat (Corporate Finance)
Alan Geeves / James Waterlow / Sam Greatrex (Sales)
+44 (0)20 7496 3000
Panmure Gordon (UK) Limited - Joint Broker
Chloe Ponsonby (Corporate Broking)
Emma Earl (Corporate Finance)
+44 (0)20 7886 2500
About Urban Logistics REIT plc
Urban Logistics REIT plc is a property investment company, quoted on the AIM market of the London Stock Exchange (AIM: SHED).
The Company invests in UK-based 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 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.
The Company's 2020 results announcement and investor presentations can be viewed at https://www.urbanlogisticsreit.com/investors/results-reports-and-presentations.
Neither this announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in or into the United States or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the Company in the United States or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions.
The securities of the Company have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. There will not be any public offering of securities of the Company in the United States.
This announcement contains inside information for the purposes of Article 7 of MAR. Upon publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR. The person responsible for arranging the release of this announcement on behalf of the Company is Pacific Capital Partners Limited.
The contents of this announcement, which have been prepared and issued by, and are the sole responsibility of the Company, have been approved by the Manager solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 ("FSMA").
The information contained in this announcement is for information purposes only and does not purport to be full or complete. The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.
This announcement is directed only at: (a) persons in the United Kingdom who are: (i) Professional Investors (within the meaning of the Alternative Investment Fund Managers Directive (2011/61/EU)) (ii) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (iii) fall within article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of the Order; and (b) persons to whom it may otherwise be lawfully communicated.
This announcement has been issued by, and is the sole responsibility of, the Company. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any member of the Company's group, Pacific Investments Management Limited, the Manager, Nplus 1 Singer Advisory LLP ("N+1 Singer"), Panmure Gordon (UK) Limited ("Panmure Gordon") or Kinmont Limited ("Kinmont") or any of their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this announcement and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions or misstatements, negligence or otherwise in this announcement.
N+1 Singer, which is a member of the London Stock Exchange, is authorised and regulated in the UK by the Financial Conduct Authority ("FCA") and is acting as nominated adviser and joint broker to the Company. N+1 Singer is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. N+1 Singer's responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company, any director of the Company or to any other person. No representation or warranty, express or implied, is made by N+1 Singer as to, and no liability is accepted by N+1 Singer in respect of, any of the contents of this announcement.
Panmure Gordon is authorised and regulated in the UK by the FCA and is acting as joint broker to the Company. Panmure Gordon is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. No representation or warranty, express or implied, is made by Panmure Gordon as to, and no liability is accepted by Panmure Gordon in respect of, any of the contents of this announcement.
Kinmont is authorised and regulated in the UK by the FCA and is acting as financial advisor to the Company. Kinmont is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. No representation or warranty, express or implied, is made by Kinmont as to, and no liability is accepted by Kinmont in respect of, any of the contents of this announcement.
The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of applicable securities laws and regulations of other jurisdictions.
This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events and the Company's future financial condition and performance. These statements, which sometimes use words such as "aim", "anticipate'', "believe", "may", "will", "should", "intend", "plan", "assume'', "estimate", "expect' (or the negative thereof) and words of similar meaning, reflect the current beliefs and expectations of the directors of the Company and/or the Manager and involve known and unknown risks, uncertainties and assumptions, many of which are outside the Company's control and difficult to predict, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The information contained in this announcement speaks only as of the date of this announcement and is subject to change without notice and the Company does not assume any responsibility or obligation to, and does not intend to, update or revise publicly or review any of the information contained to this announcement, whether as a result of new information, future events or otherwise, except to the extent required by the FCA, the London Stock Exchange or by applicable law.
Any information in this announcement in respect of past performance (including without limitation past performance of the Company, its group, shares in the Company and/or the Company's portfolio) cannot be relied upon as a guide to future performance. The price of shares and the income from them may fluctuate upwards or downwards and cannot be guaranteed.
The acquisition of any potential investments by the Company is subject, among other things, to the Company completing satisfactory due diligence, successful negotiation of terms with vendors and the approval of the directors of the Company. There can be no guarantee that any of the potential investments described in this announcement will be completed. All information relating to the potential investments described in this announcement are indicative, subject to detailed due diligence and may subsequently change as a result.