Stenprop reports strong leasing activity in the UK

STENPROP, the UK multi-let industrial (MLI) property company, said on Friday that it saw strong leasing activity, with rental uplifts averaging 20 percent, in the three months to March 31.

Chief executive Paul Arenson said in a trading update that leasing activity had been “excellent”, and demand for MLI space across the UK was as high as they had “ever witnessed”.

Stenprop shares closed 0.2 percent higher at R30.20 on the JSE on Friday, continuing a steady increase that has seen the share’s 12-month gain surpass 40 percent.

The most recent UK lockdown had an impact on rent collections, although it was not as severe as that of the lockdown early last year.

Arenson was optimistic most rents due in the latest lockdown would be collected in line with collections since the start of the pandemic, with amounts due currently at the high 90 percent collection levels.

Divestment targets were reached for the year to March 31, with more than £90 million (R1.8 billion) of MLI acquisitions.

Disposals were ahead of expectations, with German retail sales transacting at an average premium of 15 percent valuations at March 31 last year.

“It has been a strong final quarter, and we look forward to reporting our annual results to March 31, 2021, on June 11, and to setting out a detailed schedule for our transfer from the Specialist Fund Segment to the Premium Segment of the Main Market of the London Stock Exchange,” said Arenson.

During the quarter, there had been 50 new lettings compared with 39 the previous quarter, and 33 lease renewals compared with 18 the previous quarter. Seventy-five percent of leases were contracted through digital platforms.

Like-for-like passing rent was up 1.8 percent during the quarter compared with 0.8 percent the previous quarter, and was up 5.6 percent over 12 months.

Rental incentives remained low on new lettings and renewals.

Occupancy increased to 93.7 percent at March 31, as high demand continued to put pressure on vacancies, compared with occupancy of 93.1 percent at December 31 and 91 percent at March 31.

Industrials.co.uk website users were up 35 percent over the quarter and up 75 percent year-on-year.

Following the completion of the sale of Hermann Quartier – the exchange of contracts was announced on December 29 last year – the percentage of UK MLI within the portfolio was expected to rise to more than 75 percent. The net loan-to-value ratio was about 29 percent at March 31.