New float to tar­get last-mile lo­gis­tics

New real es­tate in­vest­ment trust com­ing to AIM

Shares - - CONTENTS -

The shift from high street to on­line shop­ping is driv­ing de­mand for so-called last mile ur­ban lo­gis­tics and up­com­ing AIM IPO Ware­house REIT is the latest ve­hi­cle look­ing to tap into this trend.

There are sev­eral rea­sons why the shares could be at­trac­tive once trad­ing com­mences on 20 Septem­ber (the shares are be­ing of­fered through in­ter­me­di­aries un­til 15 Septem­ber).

Ef­fec­tively a spin-off from ex­ist­ing in­dus­trial prop­erty spe­cial­ist Til­stone, the plan is to raise an ini­tial £150m. The bulk of the funds will be used to buy a seed portfolio of 27 as­sets val­ued at £109m from Til­stone, let to com­pa­nies such as Ama­zon and Boots. The plan is to pay a yield of 5.5% based on the 100p is­sue price in its first full year as a public en­tity run­ning to March 2019.

Peers in the lo­gis­tics space which are al­ready quoted trade at pre­mi­ums to net as­set value. Tri­tax Big Box REIT (BBOX), for ex­am­ple, trades at a pre­mium of 9.7%. On this ba­sis Ware­house REIT could look rel­a­tively in­ex­pen­sive.

The iden­tity of its prop­erty man­ager Sav­ills (SVS) is also a plus. The real es­tate firm, a lead­ing player in the UK in­dus­trial mar­ket, has strong links with Til­stone where Sav­ills direc­tor Si­mon Hope serves as non-ex­ec­u­tive chair­man. The new ve­hi­cle is ex­pected to ‘max­imise this re­la­tion­ship’.

Hope has been given scope to give 30% of his time to this new ven­ture and says over time it could grow to £750m to £1bn. (TS)

The bulk of the funds will be used to buy a seed portfolio of 27 as­sets val­ued at £109m

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