Urban Logistics Regulatory News (SHED)

Pacific Industrial & Logistics REIT plc

("Pacific Industrial & Logistics", the "Company" or the "Group")

28 September 2017

Portfolio acquisition and deployment of Placing proceeds

The Board of Directors of Pacific Industrial & Logistics REIT plc (AIM: PILR), the specialist UK industrial and logistics properties REIT, is pleased to announce that it has completed the off-market acquisition of a portfolio of 9 logistics assets for a total consideration of £45.5m (the "Acquisition"). The purchase price represents a net initial yield of 7.3%.

The Acquisition has been financed from the proceeds of the recent placing, completion of which was announced on 16 August 2017. The remaining proceeds of the placing will be used, together with debt finance where appropriate, to fund acquisitions from the Company's existing pipeline of potential transaction opportunities.

The Acquisition is in line with the Company's investment policy and the portfolio of single-let assets are well located across the UK. The portfolio's logistics occupiers include Culina, XPO, Sainsbury's and Travis Perkins. The assets are close to established regional transport hubs in urban or last-mile locations where there is strong occupier demand.

The acquisition price reflects an average capital value of £61 per sq. ft which is well below replacement cost. The portfolio has an attractive 7.3% running yield, low average rents of £4.80 per sq. ft. and a weighted average unexpired lease term of 2.5 years which presents opportunities to grow both the income and asset value.

Richard Moffitt commented: "We are delighted to complete the acquisition of this portfolio of well-located last-mile and urban logistics sites, thereby deploying a substantial proportion of the capital raised through the Company's recent placing. The portfolio offers a range of asset management opportunities in the short to medium term which we have already begun to progress.

As we look to deploy the remainder of the proceeds from the placing and build a bigger business, we have a number of transactions in solicitors hands and in the due diligence process. We will update shareholders with further news in due course "

For further information regarding Pacific Industrial & Logistics REIT plc: 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

About Pacific Industrial & Logistics REIT

Pacific Industrial & Logistics REIT plc is a property investment company, quoted on the AIM market of the London Stock Exchange.

The Company has been established to invest in UK based industrial and logistics properties with a view to delivering attractive dividends and capital returns to its shareholders. The investment strategy is focused on smaller single let industrial and logistics properties in key geographical locations servicing high quality tenants. Investment returns will be generated by an experienced management team focusing on quality stock selection and active asset management.

A number of structural and commercial factors currently support the attractive opportunity in the last mile/regional industrial and logistics real estate sub-sectors targeted by the Company, including: strong occupier demand (in particular due to growth in e-commerce and investment by retailers in their associated supply chain) and a decline in the supply of lettable space in industrial and logistics real estate across the UK (being more than one third lower than the most recent peak of 2009).

Acquisitions are targeted in the 6.5 to 7.5 per cent. Net Initial Yield bracket (with affordable underlying rents in the region of £4.50 to £5.50 per square foot), on an overall LTV of 35 to 40 per cent. with a significant margin over financing costs, thus presenting an attractive income, capital growth and total return proposition.

The Company's results for the period from IPO on 13th April 2016 to 31st March 2017 saw a 22.6 per cent total shareholder return, including aggregate dividends of 6 pence per ordinary share on an IPO price of 100p.