Urban Logistics Share News (SHED)

(Sharecast News) - Urban Logistics updated the market on its recent acquisitions on Wednesday, reporting that since its July equity raise of £109m, it has deployed, or committed to deploy, £88m of it on 771,748 square feet of logistics units in six "off-market" transactions.
The AIM-traded firm said the blended net initial yield was 5.4%, made up of a combination of income-producing assets and forward-funding commitments.

Separately, a further £15m was deployed before the equity raise, in three transactions for 157,516 square feet of space.

The company said its manager was continuing to transact on its pipeline of "attractive investment opportunities", and was expecting to deploy the remaining proceeds of the equity raise, as well as draw down on available debt facilities, as planned.

Urban Logistics said the recent acquisitions were primarily focused on the Midlands and the South East, but also included a "well-located" asset just off the M62 between Manchester and Leeds, as well as in the South West in Exeter, where a new logistics hub was emerging.

The acquisitions brought the total portfolio to six million square feet, and were made up of income-producing assets financed through the equity raised in July.

Those consisted of three units in Farnham, totalling 43,958 square feet for £8.5m, at a net initial yield of 4.5%, as well as a 25,990 square foot unit near Ipswich for £2.7m at a net initial yield of 5.5%, a 50,672 square foot unit at Wellingborough for £3.6m at a net initial yield of 5.2%, and two units in one transaction, being a 128,460 square foot property in Rugby and a 124,134 square foot property in Huntingdon for a combined purchase price of £27.6m, and a net initial yield of 4.5%.

Forward-funding commitments, financed through equity raised in July, included four units in a single transaction totalling 118,540 square feet on an "attractive, well-managed business park" near Rochdale, as well as a single unit of 44,608 square feet in Castle Donington, just off the M1 south of Nottingham.

The company said the combined price was £17.4m at a net initial yield of 6.2%, with the purchase being in addition to the earlier phase of the project, already announced but financed through the equity raise, of £23m of forward-funding commitments at a 6.2% yield.

Urban Logistics also extended its existing presence in the "key" Exeter Gateway logistics park by forward funding a new building of 26,964 square feet for £4.8m.

The project benefited from guaranteed rent at a net initial yield of 5.3%, with the firm already having a number of units locally.

Income-producing assets acquired prior to the July equity fundraise included a site in Nottingham containing four units totalling 119,522 square feet for £11.3m, representing a net initial yield of 6.4%, as well as a 14,510 square foot unit in Theale for £3.3m, with a net initial yield of 5.3%, and an 11,906 square foot unit at Brierley Hill, to the west of Birmingham for £1.1m, at a net initial yield of 5.0%.

"We are delighted to have acquired these high-quality assets off market with attractive yields and value enhancement potential, in line with our investment strategy," said chief executive officer Richard Moffitt.

"These properties are strategically positioned in areas with excellent transport links, strong demand for stock and limited supply."

Moffitt said the value created by the company's strategy was demonstrated by both the quality of the acquisitions, as well as the 11 lettings and lease events signed in the period, covering 702,206 square feet of space.

"With the UK's fundamental mismatch between the demand for last-mile logistics assets and their availability, the company, with its unparalleled network and sector knowledge, is uniquely placed to drive significant rental and capital value growth for shareholders."

At 0902 BST, shares in Urban Logistics were down 0.68% at 176.29p.