(Alliance News) - Industrials REIT Ltd said on Friday it had put acquisitions largely on hold as it warned that the "trading environment will become more difficult over the next 12 months".
The London-based real estate investment trust, investing in UK multi-let industrial properties, said it had largely ceased investment activity because the UK commercial property market was adjusting downward due to rising interest rates, high inflation and an increasing risk of recession.
"In the meantime, we are preserving capital, keeping our leverage low and waiting for an appropriate time to re-enter the market when values stabilise," Industrials REIT said.
"We continue to watch the market carefully and believe that attractive and accretive acquisition opportunities will emerge once the market has gone through a period of repricing," said Industrials REIT Chief Executive Paul Arenson.
During the second quarter to September, the company completed two multi-let industrial acquisitions totalling GBP5.2 million.
The group said 88% of rents due in the second quarter ended September 30 had been collected by October 26, compared to 87% rent collected in the first quarter.
Industrials REIT expects rent collections for the financial year ending March 31 to normalise at pre-Covid levels of over 98%.
Occupancy rate was at 92.8% in the second quarter from 93.5% in the first quarter.
The group said it had taken proactive steps to forfeit and replace non-performing tenancies that had been protected by the pandemic moratorium for the years ended March 31, 2022.
Arenson said tenant demand had continued to be strong, but warned that he expected the trading environment to become more difficult over the next 12 months. But to date, the company had not seen any evidence of this in its portfolio.
In London, shares in Industrials REIT dropped by 2.1% to 131.18 pence on Friday. They were up 1.4% at ZAR27.97 in Johannesburg.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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