Industrials REIT has said it is well placed to take advantage of the current “volatility” in the commercial investment market, despite showing “a degree of caution”.
Paul Arenson, chief executive at the MLI specialist, said its space had remained in demand, despite the “backdrop of negative headlines around inflation, rising interest rates and the threat of recession”.
A trading update for the three months to the end of June, its Q1, showed an average uplift in passing rent of 27% on new lettings and renewals, with 388,000 sq ft under offer.
Arenson added: “The UK commercial investment market is currently experiencing volatility as buyers take stock of rising interest rates and economic uncertainty. Industrials REIT remains well placed to capitalise on any opportunities which arise from this volatility, with a low LTV of 26% and free cash available to deploy into acquisitions at the right time.”
But it added that “a degree of caution”, caused by the significant increases in the cost of debt and risk of recession and rising inflation, had stopped it from buying space. In the past quarter it made just two acquisitions for a total of £3.3m, and both were extensions to existing sites.
It added: “However, we will continue to target transactions which we believe will be accretive to our long-term earnings growth and have a strong pipeline of MLI opportunities under consideration.”
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