Urban Logistics Regulatory News (SHED)

Pacific Industrial & Logistics REIT plc

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

Trading Update

Overview

Proceeds from the Company's placing in August 2017 have been fully invested. When combined with the Company's existing portfolio, the recent acquisitions bring the total value of the Company's portfolio to approximately £125m:-

§ Total of 28 assets with 31 tenancies and a limited vacancy rate of 6.4%

§ Weighted average unexpired lease term of 5.2 years across the portfolio

§ Weighted average purchase yield since IPO of 7.4%

§ Low average rents of £4.88 per sq. ft. with significant upside potential

Richard Moffitt, Chief Executive, commented:

"We remain focused on growing our portfolio of urban logistics assets, enabling our diverse tenant base to meet the challenges of e-commerce, modern logistics and changing infrastructure demands.

"Urban logistics as a subsector continues to outperform the wider real estate market - proving to be resilient to the challenges presented by Brexit and other shifting economic dynamics. We expect c.£4bn of assets to change hands in 2018, enabling us to selectively focus on high-quality assets which will underpin our returns. The Company remains ambitious to build a bigger business and, with a strong pipeline of off-market opportunities, continues to assess potential additional equity and debt financing for further acquisitions."

Acquisitions and disposals

Recent acquisitions (£37.3m in total) included:-

§ Six logistics assets acquired for £31.5m at a net initial yield of 7.1%. Current tenants include DHL, who occupy three of the warehouses (c.53% of acquired rent roll)

§ Moulton Park, Northampton acquired for £3.0m at a net initial yield of 6.4%, let to Panther Logistics

§ Seacroft, Leeds acquired for £2.8m at a net initial yield of 6.8%, let to Komori UK Limited and Pharmacy2u Limited

In addition, the £5.8m disposal of an asset in Bedford delivered a 6.0% net initial yield and a return of 64% on the April 2016 purchase cost.

Asset management

Across the existing portfolio:-

§ Rent review agreed at a 44,195 sq. ft. site in Bedford at £6.00 per sq. ft., a 66% increase to existing passing rent

§ Break options were removed across several sites, including assets in:

§ Bardon (73,791 sq. ft.), unexpired term to 2024

§ Haverhill (232,320 sq. ft.), unexpired term to 2023

§ Planning has been submitted to add a further 25,000 sq. ft. of distribution capacity at a site located on Edison Road, Bedford

Financing

The Company's loan facility with Santander has been extended to a five-year term from December 2017 at a margin of 210bps. The Company has fixed terms over 70% of the drawn balance for five years, representing an all-in cost of c.3.3%. The loan-to-value across the Company's portfolio is currently 39%.

Outlook

The Company expects to pay total dividends of not less than 6.0 pence per share in respect of the financial year to 31 March 2018.

The Board anticipates that year-end earnings and portfolio valuation to 31 March 2018 will be in line with market expectations. Preliminary results will be announced in May 2018.

In addition, the Board is considering various potential acquisitions and the necessary equity and debt financing to complete them.

- Ends -

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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, (AIM: PILR).

The Company has been established to invest in UK based industrial and logistics properties with the objective of generating attractive dividends and capital returns for its shareholders. Its investment strategy focuses on strategically located smaller single let industrial and logistics properties 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, (driven by the growth of 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 6.0-7.5% net initial yield bracket, (with affordable underlying rents in the region of £4.50-£5.50 per sq ft.), on an overall LTV of 35-40% and a significant margin over financing costs, thus presenting attractive income, capital growth and total return opportunities.