UK warehouse investor Urban Logistics REIT has announced the launch of a capital raising of up to around £130 mln (€142 mln) to acquire more properties.
New shares in the company will be offered at 139p each, a 5.4% discount to Urban Logistics REIT's closing price on Friday.
Proceeds will be used to acquire an identified pipeline of 'high-quality logistics properties' that met investment identified by investment manager Pacific Capital Partners. The pipeline comprises a total of 59 buildings worth £389 mln, with a weighted average unexpired lease term of approximately 6.7 years and a weighted average net initial yield of approximately 6.4%.
The company also announced that it would declare, at the time it announced the results of the placing, a special dividend of 3.25p share in respect of the six months ending 30 September, and in lieu of what would otherwise have been the half-year interim dividend.
'E-commerce accounts for an ever increasing proportion of UK total retail sales and we have all experienced over recent months the importance of supply chain resilience,' CEO Richard Moffitt said. ‘Our focus is on mid-box logistics assets at the end of evolving logistics chains. These remain in short supply and offer excellent opportunities for investors seeking exposure to this high-growth sub-sector of the real estate market. We are in negotiations on an exciting pipeline of logistics properties that fit this profile, enabling the rapid deployment of funds raised pursuant to the Issue into accretive high-quality income-generating assets. With greater scale, we are confident that we can continue to grow the Company and deliver attractive shareholder returns.’
Since its IPO in April 2016, Urban Logistics has raised approximately £232 mln of equity capital, that together with debt finance and realisation proceeds, has been used to acquire 71 logistics properties at a 6.7% weighted average Net Initial Yield. As at 21 September 2020, the portfolio consists of 64 high-quality urban logistics properties including 5 development sites.