(Alliance News) - Stenprop Ltd on Thursday said it completed a number of new lettings and lease renewals in the last three months of 2019, resulting in a small increase in average rent while passing rent remained below estimate rental value.
The UK multi-let industrial property firm, which is dual listed in London and Johannesburg, completed 33 new lettings and 21 lease renewals in the three months ended December 31. This amounted to 182,163 square feet and GBP1.2 million per annum of contractual rental income.
Average rent on the entire UK multi-let industrial portfolio at the end of December was GBP5.19 per square foot, up 1.0% from GBP5.14 per square foot at the end of September. However, passing rent was still 7.5% below the portfolio's average estimated rental value of GBP5.61 per square foot.
The UK multi-let industrial portfolio makes up 46% of Stenprop's overall portfolio.
The average rental incentive on new lettings and renewals was 2.5 months, with an average term to break of 4.2 years and 5.2 years to lease expiry.
As at December 31, Stenprop's vacancy rate was 5.8%, excluding Coningsby Park in Peterborough, reduced from 6.1% on September 31. Coningsby Park's vacancy rate was 7.5%, falling from 8.5%.
"The most significant transactions completed were a letting of 18,000 sq ft at Coningsby Park in Peterborough on a five-year term with four months' rent free and a letting of 14,000 sq ft at Link at Huyton Business Park in Liverpool for a 10-year term with zero rent free incentive," said Stenprop.
During the three month period, Stenprop acquired Western Campus Business Park in Strathclyde for GBP4.6 million.
Chief Executive Paul Arenson said: "Our [multi-let industrial] portfolio has delivered solid rental growth in the quarter providing further confirmation of the favourable supply and demand fundamentals of the sector. We are confident this will continue for the foreseeable future. We are seeking further MLI acquisitions as we progress with the sales of our non-MLI portfolio. We recently announced that we had exchanged contracts for the sale of our Bleichenhof property in Hamburg. When this transaction completes, the MLI component of our property portfolio will be approximately 56%. In addition, we will have the net sale proceeds available for more MLI acquisitions."
Stenprop's loan-to-value ratio at the end of 2019 was 45%, and was 38% including unrestricted cash.
Stenprop is registered in Guernsey. In Johannesburg, its shares were untraded at ZAR25.50. In London, its shares were quoted at 129.00 pence.
By Anna Farley; annafarley@alliancenews.com
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