(Alliance News) - Industrials REIT Ltd warned on Friday that the trading environment may become "difficult" as the year progress, but said tenant demand in the multi-let industrial market remains strong for now.
In a trading update, the London-based real estate investment trust said it continues to lease space at attractive rents with minimal incentives.
The occupancy rate fell to 92.4% as at December 31 from 92.8% as at September 30. Year-on-year, occupancy declined from 93.8%.
But Industrials REIT said it believes the continued strength of tenant demand and rental growth in the third quarter means that the drop in occupancy is not an indicator of a trend at this stage.
The trading environment might become more difficult as it progress through 2023, Industrials REIT said, but to date it has seen limited evidence of this in its portfolio.
For the third quarter that ended December 31, 90% of rents due this period had been collected by January 25, 2023, compared to 87% in the second quarter.
The company also said 97% of rents due for the financial year ended March 31, 2022 had been collected by January 25.
Like-for-like passing rent over 12 months grew over 5.0% on the back of strong releasing activity and the expiry of a significant rental incentive at a property in Ashby-de-la-Zouch, in Leicestershire, England.
Chief Executive Paul Arenson said the multi-let industrial market finished 2022 on a strong footing, with high demand, limited supply, and the affordability of the group's high-quality space translating into a 31% average uplift in rent at renewal or re-letting.
In London, shares in Industrials REIT were up 1.1% at 129.36p on Friday. They were also flat at ZAR27.00 in Johannesburg.
By Artwell Dlamini, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.