Warehouse REIT secures debt, moots equity raise

AIM-listed Warehouse REIT, the UK investor in last mile assets, has secured a new five year £220 mln (€264 mln) debt facility to replace its existing £210 mln HSBC facility.

The new facility extends the term of the debt and reduces the margin by 14 basis points from a blended 2.14% above LIBOR to 2.00% above LIBOR, Warehouse REIT said.

The firm also said that it was contemplating an equity fundraising to benefit from a pipeline of near term opportunities, which it would seek to deploy, together with debt finance where appropriate, in line with its investment strategy.

Warehouse REIT recently completed or exchanged on the sale of 13 smaller non-core assets for a combined price of £17.6 mln at an average of 7.6% ahead of 30 September 2019 book values and 10.1% ahead of cost, reflecting a blended 6.7% net initial yield.

This followed the acquisition of the 29-acre Midpoint Estate in October 2019 for a purchase price of £15.5 mln, representing a net initial yield of 6.6%.

The firm said that after increasing the total occupancy in its portfolio to 92.7% from 91.5% as of September 30, it was pursuing several opportunities to purchase assets at prices below replacement value.

The identified pipeline includes assets with a target investment yield in excess of 6% amounting to approximately £352 mln, of which approximately £72 mln are in exclusive or final negotiations or have solicitors instructed and approximately a further £280 mln are in detailed negotiations.

Warehouse REIT, which floated in September 2017, is led by chairman Neil Kirton.

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