Pacific Industrial & Logistics REIT has announced a potential £110m share placing to fund a pipeline of logistics asset purchases.
The deals, sourced off-market, are expected to have an acquisition cost of £170m, reflecting a yield of 7.2%. The gearing will be at a 40% loan-to-value ratio.
Pacific & Industrial is an AIM-listed REIT that floated in April 2016 and invests in smaller lot-sized industrial assets. It said today’s placing provided “significant potential to grow rents and lengthen leases over the medium term”.
The assets are fully occupied with an average lease term of 5.6 years.
The company said the placing and acquisitions would support the company’s near-term growth, diluting certain operating costs and reducing the total expense ratio, further enhancing its capacity to deliver a targeted net dividend yield in excess of 6%
Nigel Rich, non-executive chairman at Pacific Industrial & Logistics REIT, said: “Since listing in April 2016, we have delivered on our objectives by establishing a strong platform of assets that is delivering significant capital and income growth. Having successfully deployed the monies raised at IPO and at the subsequent equity raise, we see a compelling opportunity to significantly expand the scale of our business through a pipeline of off-market acquisitions, enhancing the company’s ability to deliver target returns whilst benefitting shareholders by reducing the total expense ratio.”
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