New float to target last-mile logistics
New real estate investment trust coming to AIM
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