Abrdn Property Regulatory News (API)

abrdn Property Income Trust Limited

(an authorised closed-ended investment company incorporated in Guernsey with registration number 41352)

LEI Number: 549300HHFBWZRKC7RW84

(The "Company")

30 OCTOBER 2023

ASSET MANAGEMENT UPDATE

Following the positive letting transactions completed during the first half of the year, abrdn Property Income Trust (API) is pleased to be able to announce some further asset management activity that has secured over £1.3m p.a. in rent through new lettings and lease renewals.

In the office sector, the lease over the fourth floor at One Station Square in Bracknell has now completed, securing a rent of £132,250 p.a. At The Pinnacle in Reading, our existing tenant Egnyte Limited has upsized on the fifth floor, taking 4,174 sq.ft at an annual rent of £130,000. This rent is 11% ahead of the March 2023 valuation. The lease over the first floor at 160 Causewayside, Edinburgh has been regeared with the removal of the tenant break option. This has secured £157,000 p.a. of rent for a further 5 years.

At 54 Hagley Road in Birmingham, the previously reported lettings to the Chamber of Commerce and UK Cab have now completed following the conclusion of the landlords works. Combined, these reflect a total of 27,770 sq.ft and £538,090 p.a. in rent. The positive momentum at this building has continued with a letting of part of the 4th floor to Property Investor Network, securing a rent of £49,830 p.a.  Terms have also been agreed on two further lease renewals of 9,365 sq.ft where the tenants are remaining in their existing suites and the rents are increasing by an average of just over 30% from previous levels.

Refurbishment works at our logistics unit on Rainhill Road in Washington are progressing well (including the completion of a new 1,150kWp PV scheme on the roof) and are due to complete in early November.  The unit is let under an agreement for lease and the new 15-year lease will start then.  This letting, along with the others completed since quarter end, will reduce the void rate as at 30 September from 8% to 4.4%.

This activity demonstrates that API's investment strategy of investing in assets that tenants want to occupy remains relevant.  The API office assets, which account for just under 18% of the overall portfolio, continue to be attractive to occupiers with good levels of amenity at attractive rental levels even in a market with significantly reduced demand and take-up.

In the industrial sector, API is pleased to announce completion of a lease regear at Monkton Business Park in Hebburn. Hitachi Construction Machinery (UK) Limited have taken a new 20-year lease at a passing rent of £310,500 p.a., which is an increase of 19.4% over the previous passing rent. As part of the transaction, Hitachi are obliged to carry out a package of works that are anticipated to improve the EPC rating to an "A".

The EPC on API's Bolton industrial unit let to DPD has recently been reassessed following completion of the letting and the landlord's refurbishment works. API took the opportunity, at the expiry of the previous lease, to carry out an extensive package of upgrades to the unit including the extension of the roof-mounted solar panel installation, an increase in on-site biodiversity and the inclusion of staff welfare facilities. Following the reassessment, the EPC has been lodged as an "A" with a score of -54. This negative score reflects the fact that the unit is operationally carbon negative.

API's speculative 107,000 sq.ft industrial development at Knowsley is progressing well, with practical completion scheduled for the turn of the year. The unit will be a best in class building with enhanced ESG credentials, and this has been reflected in the occupational interest received to date. Whilst early days, we have received proposals from two parties and are hopeful of agreeing a letting of the unit ahead of completion.

Mark Blyth, Deputy Fund Manager of API commented: "Despite challenging market conditions, we continue to have good success letting our void properties as well as retaining existing occupiers with lease regears. Reducing void property costs and increasing rental income, whilst at the same time ensuring a strong focus on ESG, will strengthen API's overall financial standing and position it well for the future."

All Enquiries:

Jason Baggaley - Real Estate Fund Manager, abrdn

Tel: 07801039463 or jason.baggaley@abrdn.com

Mark Blyth - Real Estate Deputy Fund Manager, abrdn

Tel: 07703695490 or mark.blyth@abrdn.com

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