TIDMSTP
RNS Number : 0724R
Stenprop Limited
25 October 2019
STENPROP LIMITED
(Registered in Guernsey)
(Registration number 64865)
LSE share code: STP JSE share code: STP
ISIN: GG00BFWMR296
("Stenprop" or the "Company")
TRADING UPDATE
25 October 2019
Stenprop, the UK multi-let industrial property company, today
publishes a trading update for Q3 2019, the period from 1 July 2019
to 30 September 2019.
Continued leasing success and significant rental growth
Multi-let industrial (MLI) portfolio lettings:
- We completed 22 new lettings and 9 lease renewals generating
GBP 648,142 of contractual income over 104,633 sq ft. The average
rental uplift on the previous passing rent was 21% on new lettings
(Q2 2019: 24%) and 19% on lease renewals (Q2 2019: 16%). The
average rental incentive given across all new lettings and renewals
was 2.5 months on a 5.08-year average term
- The average rent on the MLI portfolio is now GBP5.14 /sq ft
(Q2 2019: GBP5.08/sq ft), reflecting a 1.2% increase in passing
rent from the previous quarter. The current passing rent is 7.8%
below the average estimated rental value of the portfolio of
GBP5.57/sq ft (Q2 2019: GBP5.50/sq ft)
- The vacancy rate stands at 6.1% (excluding the space currently
under refurbishment at Coningsby Park, Peterborough), up from 5.5%
as at the end of Q2 2019.
- The most significant transactions completed were a letting of
27,000 sq ft at Compass Industrial Park in Liverpool on a five-year
term with three months' rent free and a letting of 21,000 sq ft at
Eurolink 31 in Wakefield for a 10-year term with three months' rent
free
Attractive MLI acquisitions
- We acquired eight MLI estates for an aggregate purchase price
of GBP23.9 million, reflecting an average capital value of GBP75/sq
ft:
-- comprising 317,923 sq ft with an average occupancy rate of 92% and 89 tenants; and
-- providing an additional GBP1.6 million of rental income, averaging GBP5.54/sq ft
- We acquired the freehold interest in a 3,000 sq ft unit on our
existing Holbrook Enterprise Park, Sheffield, further consolidating
our ownership of the estate
Non-MLI portfolio performs in line with business plan
- We completed six lettings, totalling 34,421 sq ft, which will
provide total annual rent of GBP380,655; the average term on the
new lettings was 5.2 years
- The vacancy rate stands at 1.0%, down from 1.2% as the end of Q2 2019
Paul Arenson, CEO of Stenprop, said:
"The MLI occupational market remains strong with demand
outstripping supply. Lease incentives remain limited and we are
realising significant rental uplifts when leases are renewed.
"We have also had a good quarter of individual MLI acquisitions
after an unusually quiet start in the first quarter of the
financial year. There was marginally less competition in the market
over the period, largely as a result of the UK's political
instability.
"Finally, we continue to make progress on the development and
implementation of our Industrials operating platform. Over the
quarter we commenced a substantial upgrade of our financial and
customer engagement systems, which we expect will deliver material
cost and efficiency gains in due course, as well as supporting our
serviced-industrial business plan".
Stenprop is continuing its transition into a focused UK MLI
company, with the aim of becoming the UK's leading MLI business.
Stenprop has set out a transition plan which involves transitioning
the portfolio to at least 60% MLI and reducing overall leverage to
a loan-to-value (LTV) ratio of no more than 40% by March 2020, with
the plan to transition to 100% MLI over the following 12 to 24
months.
At 30 September 2019, MLI comprised 45%(1) of Stenprop's
portfolio and the LTV was 42%(1) . When unrestricted cash is added
to this measure the overall LTV was 39%(2) .
The financial information on which this trading update is based
has not been reviewed or reported on by the Company's external
auditors.
1. These figures are based on our 31 March 2019 valuations
adjusted for subsequent acquisitions and disposals and changes in
foreign exchange rates.
2. Calculated as gross borrowing less unrestricted cash, divided
by gross asset value based on our 31 March 2019 valuations adjusted
for subsequent acquisitions and disposals and changes in foreign
exchange rates.
For further information:
Stenprop Limited 44(0)20 3918 6600
Paul Arenson
Julian Carey
James Beaumont
Numis Securities Limited (Financial Adviser) 44(0)20 7260
1000
Hugh Jonathan
Vicki Paine
Tavistock (PR Adviser) 44(0)20 7920 3150
James Whitmore
James Verstringhe
Java Capital 27 (0)11 722 3050
(JSE sponsor)
About Stenprop:
Stenprop is a Guernsey-registered UK REIT. The objective of the
Company is to deliver sustainable growing income to its investors.
Stenprop's investment policy is to invest in a diversified
portfolio of UK multi-let industrial (MLI) properties with the
strategic goal of becoming the leading MLI business in the UK. For
further information, go to www.stenprop.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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