We operate in a compelling market, which offers significant opportunities for value creation.

Strong occupier demand

Urban warehouses are critical to the successful operation of a wide range of businesses, from small manufacturers to major retailers. The need to fulfil the rapid growth in e-commerce has created a powerful new source of demand for this space in recent years, increasing the competition for available units. It is these multiple levels of demand for urban warehouse space, that drives our view that the sector is mid-cycle and makes the sector resilient to economic downturns.

Shortage of supply

Despite strong demand there is little new supply, as capital values in the small and medium sized warehouse sector are well below replacement cost, making it uneconomic to develop new space. Vacancy rates have more than halved as a result over the last five years, reaching 5.7% for all industrial assets as at 31 March 2018.

Sustainable and growing income

Secure and growing income is key to value creation. Our diversified portfolio, with multiple tenants, units, locations and potential uses, reduces risk and gives us a sustainable income stream. At the same time, the fundamentals of the occupier market are feeding through to strong growth in rents, from their current low base. We also have the opportunity to drive further rental growth, through active asset management.

Top management

Our Investment Manager, Tilstone Partners Limited (“TPL”) provides us with a highly experienced management team, with deep knowledge of the sector and a strong network of industry contacts.  Following a wealth of individual experience spanning decades, they have a five-year track record working together. In addition, TPL’s close relationship with Savills enables it to capitalise on its best-in-class property management, planning, logistics leasing and regional investment teams. This outsourced model gives us real expertise at minimum cost, as well as strong operational gearing.

Progressive dividends and strong returns

Robust revenues and low costs will drive earnings growth, allowing us to reward shareholders through attractive and progressive dividends. For 2018/19, our first full year as a public company, we have increased our targeted dividend to 6.0 pence per share, reflecting a yield of 6.0% based on the issue price of 100 pence per share, with further growth thereafter. We aim to achieve a total return of at least 10% per annum.