RNS announcement

26 January 2022

Warehouse REIT plc

(the 'Company' or 'Warehouse REIT')

Trading Update

Record levels of occupier demand drive new lettings significantly ahead of ERVs

Warehouse REIT, the AIM-listed specialist warehouse investor, announces a trading update covering the period since 1 October 2021.

During the period the Company completed 12 new lettings and 10 lease renewals across 141,400 sq ft of space.  These transactions were completed at 10.5% ahead of 31 March 2021 ERVs, generating £0.9 million per annum of contracted rent. The portfolio's total occupancy has decreased by 1.1% from 30 September 2021 to 93.5% (as at 31 December 2021), however effective vacancy is just 1.6% excluding units under refurbishment or under offer to let (30 September 2021: 2.5%). The space currently under offer should deliver approximately £1.1 million per annum of rent.

Further progress has been made at the Company's Radway Green site in Cheshire, with the completed acquisition of an adjoining owner's 16 acre site for £7.5 million before costs. The Company now has full ownership of the 41 acre site, with planning consent for 803,000 sq ft of warehouse space. In addition, the Company has exchanged contracts to acquire a further 60 acres of land zoned for employment. As previously announced, a planning application has been submitted for an additional 1 million sq ft. Subject to planning, the entire scheme has the potential for c. 1.8 million sq ft of warehouse space in a prime logistics location, less than 1.5 miles from Junction 16 of the M6 motorway.

The Company also reaffirms its near-term intention to move to the Main Market of the London Stock Exchange.

Andrew Bird, Managing Director of Tilstone Partners Ltd, the investment advisor of Warehouse REIT, commented: "Occupational demand saw another record year in 2021, with take-up of UK warehouse space exceeding 50 million sq ft, meaning that supply is becoming increasingly constrained.  It is against this backdrop that we have achieved new lettings substantially ahead of ERVs, which demonstrates the appeal of Warehouse REIT's space to occupiers and has established a new rental tone across a number of the Company's multi-let estates. Demand shows no sign of slowing, reflected by the level of space currently under offer at rental levels materially ahead of ERVs."

"This tightening of supply coupled with continued investment yield compression is underpinning the dual focus on continued asset management successes, alongside bringing forward the Company's development pipeline, notably the 100 acres at Radway Green."

Market overview

The industrial and warehouse sector has continued to outperform the UK property market with investors attracted by strong rental growth and secure income, which has put downward pressure on yields. According to the CBRE UK Monthly Index, industrial capital values increased by 13.9% in the quarter to 31 December 2021, with rental growth of 4.1%. The next valuation date for the Company's portfolio will be 31 March 2022.

Rent collection

Rent collection has remained strong with over 98% of rent due for the financial year ending 31 March 2022 collected. Rent collected for the current quarter is expected to be in line with previous quarters.

Asset management

The 12 new lettings represent 41,300 sq ft of space and were achieved at 10.4% ahead of 31 March 2021 ERVs, generating contracted rent in excess of £406,000 per annum. The Company has continued to capture reversionary potential from the portfolio, with 10 lease renewals generating a combined contracted rent of £511,000, an uplift of 23.5% compared to the previous rent and 11.5% ahead of 31 March 2021 ERVs.

Highlights during the period include:

·    A new 15-year lease with no break to a leading international food operator, on a 4,000 sq ft unit at Newport Road, Cardiff. The rent of £105,000 per annum represents a 23.5% premium to 31 March 2021 ERV.

·    A 25,000 sq ft lease renewal at Rossendale Industrial Estate in Burnley. The new lease generates total rent of £114,000 per annum secured over a 10-year term, with a break at year five and is 39.0% ahead of the previous rent.

·    A 37,000 sq ft lease renewal at Maxwell Road, Peterborough, for 10 years with no break. The new lease generates £160,000 per annum and is 11.0% ahead of the previous rent.

-ENDS-

Further information on Warehouse REIT is available on its website:

http://www.warehousereit.co.uk

Notes to editors:             

Warehouse REIT plc invests in and manages urban and 'last-mile' industrial warehouse assets that support the continued growth in e-commerce.

Our purpose is to own and manage warehouses in economically vibrant urban areas across the UK, providing the space our occupiers need for their businesses to thrive.

As we grow, our vision is to become the UK's warehouse provider of choice.

The Company's shares were admitted to trading on AIM in 2017.

The Company is an alternative investment fund ("AIF") for the purposes of the AIFM Directive and as such is required to have an investment manager who is duly authorised to undertake the role of an alternative investment fund manager. The Investment Manager is currently G10 Capital Limited.