Industrials REIT is expecting to see erosion of its top-line revenue growth this year as interest rates and cost base inflation hit trading.
The warning came despite the group reporting like-for-like growth in passing rent of 4.8% and 10.6% growth in estimated rental value over the 12 months ended 31 March.
During the first three months of 2023, the firm completed 120 lettings with a combined rent roll of £2.6m. Average passing rent increased by 27% across the new lettings, which the firm said was its 10th successive quarter of 20%-plus average uplifts.
Occupancy across the portfolio remained stable at 92.3%
Chief executive Paul Arenson said: “Our final trading update of the financial year has seen continued strong underlying occupational conditions in the MLI market driven by high demand, limited supply and affordable rents. “
He added: “Despite the economic headwinds, the MLI occupational market remains robust and supportive of rental growth. However, Industrials REIT is not immune to these forces, and during this period is likely to see a proportion of top-line revenue growth eroded by higher interest rates and cost base inflation. Nevertheless, the business remains well positioned to weather the storm with a low level of debt and a highly diversified customer base and portfolio.”
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