Urban Logistics posts rental uplift

Urban Logistics REIT has reported an average like-for-like uplift of 23% across all of its lease events in the three months to the end of March. The outcome reflects stabilising values and improving rents in the sector, according to the REIT. The listed last-mile logistics owner said it had made three lettings and three rent reviews in the period covering 374,000 sq ft, including one vacant property. A lease was signed at Interlink way in Bardon with Elliott Baxter and Company for a 73,791 sq ft warehouse, marking a 19% increase in like-for-like rental income. Another lease agreement was signed with Corndell Quality Furniture, which is expected to complete in May 2024, for a vacant 121,078 sq ft warehouse in Andover. It will generate nearly £1m in additional rental income. Elsewhere, a rent review has been agreed with H&K Distribution for a 128,460 sq ft unit in Swift Park, Rugby, providing a 28% increase in like-for-like in rental income Total new annualised rental income stood at £1.3m for the period, equalling to 0.3 pence of rental income per share. New lettings produced £1.1m of new rental income, with a WAULT of 11.9 years. Rent reviews generated some £200,000 of further rental income. The REIT posted an occupancy rate of 94.2% at 31 March, compared with an equivalent 93.2% at the end of December 2023. It said there were further leases under offer post period end. During the period, the REIT sold its 24,462 sq ft Elms Industrial Estate in Bedford for £3.8m. It transacted at a 1.9% premium to book value. Richard Moffitt chief executive at Urban Logistics, said: “We have seen increased occupational activity in the latter stages of the financial year, with a significant rise in like-for-like rental rates. This provides evidence that valuations are stabilising and rents improving in our sector, as tenants continue to localise their distribution networks to be closer to their end customers, and demand for our mid-size, single-let assets continues to increase. “The optimism in our sub-sector supports our confidence for the coming year, during which we will see the benefit of a full year’s rental income from recent leasing activities flowing through to higher earnings. Our increased occupancy rate is welcome, and the majority of our remaining vacancy is made up of two assets, for one of which a new lease is at an advanced stage of negotiation.”