Investment case

We operate in a compelling market, which presents significant opportunities for long-term value creation through portfolio growth, including developing new space, and active asset management.

Growing occupier demand

There are powerful long-term trends driving demand for urban warehouse space, in particular the structural shift from high street retail to e-commerce. Covid-19 has accelerated this shift and combined with the current uncertain geopolitical environment, is encouraging occupiers to take more space to reinforce their supply chains as a number of occupiers materially increase their UK stock levels.

Constrained supply

Capital values for small and medium‑sized warehouses remain below replacement cost, making it uneconomic to develop new assets in many areas. Combined with strong occupational demand, this means there is an increasingly limited supply of urban warehouse space available to let in economically attractive locations.

Growing income

The demand and supply imbalance is contributing to growing market rents. Coupled with the benefits of our active asset management programme and the strong reversionary potential in the portfolio, this supports underlying growth in our rental income each year.

Occupier affordability

Average rents across our portfolio are just £5.56 per sq ft, which represents a tiny fraction of our occupiers’ cost base, providing significant scope to drive rents without impacting occupier affordability.

Top management

We have an experienced Board and a highly knowledgeable Investment Advisor, Tilstone, which gives us a deep understanding of the sector and a wide network of industry contacts through which we can source investments.

Scope for further value creation

We continue to seek existing assets and development schemes to acquire at accretive valuations and have a pipeline of further opportunities. In addition, our active asset management programme aims to drive capital values, rental growth and our sustainability performance, while also creating new warehouse space on underutilised land within the portfolio.

Strong returns and quarterly dividends

Our diversification by occupier, lease length and geography reduces risk and gives us a sustainable income stream, allowing us to reward shareholders through attractive dividends. These dividends, along with capital growth, contribute to a total return target of 10% per annum.

Key performance indicators

We use the following key performance indicators (“KPIs”) to monitor our performance and strategic progress.

Occupancy (%)

Description

Total open market rental value of the units leased divided by total open market rental value, excluding development property and land, and equivalent to one minus the EPRA vacancy rate.

Why is this important?

Shows our ability to retain occupiers at renewal and to let vacant space, which in turn underpins our income and dividend payments.

How we performed

Occupancy fell slightly over the period, largely due to the timing of refurbishment and letting activity. Adjusted for properties under refurbishment or under offer, occupancy was 95.8%.

Like-for-like rental income growth (%)

Description

The increase in contracted rent of units owned throughout the period, expressed as a percentage of the contracted rent at the start of the period, excluding development property, land and units undergoing refurbishment.

Why is this important?

Shows our ability to identify and acquire attractive properties and grow average rents over time.

How we performed

We delivered further good rental growth, as we continued to capture the reversionary potential in the portfolio through active asset management, as well as benefiting from strong market rental growth.

Rental increases agreed versus valuer’s ERV (%)

Description

The difference between the rent achieved on new lettings and renewals and the ERV assessed by the external valuer, expressed as a percentage above the ERV at the start of the period.

Why is this important?

Shows our ability to achieve superior rental growth through asset management and the attractiveness of our assets to potential occupiers.

How we performed

We maintained our track record of achieving rental levels ahead of ERV.

Like-for-like valuation increase (%)

Description

The increase in the valuation of properties owned throughout the period under review, expressed as a percentage of the valuation at the start of the period, and net of capital expenditure.

Why is this important?

Shows our ability to acquire the right quality of assets at attractive valuations, add value through asset management and drive increased capital values by capturing rental growth.

How we performed

The portfolio saw another material increase in its valuation, benefiting from further market yield compression and our asset management programme.

Total cost ratio (%)

Description

EPRA cost ratio including direct vacancy costs but excluding one-off costs. The EPRA cost ratio is the sum of property expenses and administration expenses, as a percentage of gross rental income less ground rents paid.

Why is this important?

Shows our ability to effectively control our cost base, which in turn supports dividend payments to shareholders.

How we performed

The total cost ratio declined significantly in the year, reflecting the strong revenue increase and our focus on cost control.

EPRA NTA per share (p)

Description

This net asset value measure assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability.

Why is this important?

Shows our ability to acquire well and to increase capital values through active asset management.

How we performed

The significant growth in the portfolio valuation was the primary driver of the increase in the NTA during the year.

Dividends per share (p)

Description

The total amount of dividends paid or declared in respect of the financial year, divided by the number of shares in issue in the period.

Why is this important?

Shows our ability to construct a portfolio that delivers a secure and growing income, which underpins progressive dividend payments to shareholders.

How we performed

We outperformed our dividend target for the year of at least 6.2 pence per share.

Loan to value ratio (%)

Description

Gross debt less cash, short-term deposits and liquid investments, divided by the aggregate value of properties and investments.

Why is this important?

Shows our ability to balance the additional portfolio diversification and returns that come from using debt, with the need to manage risk through prudent financing.

How we performed

The LTV increased over the year to 25.1% and we continue to seek accretive acquisitions that will further raise the LTV towards our 35% target.

Disclaimer

Electronic versions of the materials you are seeking to access are being made available on this website in good faith and are for information only.

These materials are not directed at or accessible by persons in the United States or persons resident or located in the United States, Australia, Canada, Japan, the Republic of South Africa, New Zealand or any other jurisdiction where the extension of availability of the materials to which you are seeking access would breach any applicable law or regulation.

By accessing this website you are representing to Warehouse REIT plc (the “Company”) and its advisers that you are not: (i) a US Person (within the meaning of Regulation S under the US Securities Act of 1933, as amended the “Securities Act”) and are not acting on behalf of a US Person, nor purchasing with a view to re-sale in the US or to or for the account of a US Person, and that you are not an employee benefit plan subject to the United States Employee Retirement Income Security Act of 1974 and the regulations promulgated thereunder (in each case as amended) (“ERISA”) or similar US laws or an individual retirement account as defined in section 408 of the US Internal Revenue Code; or (ii) a resident of Australia, Canada, Japan, the Republic of South Africa, New Zealand or a jurisdiction where the extension of availability of the materials to which you are seeking access would breach any applicable law or regulation, and that you will not: (x) offer, sell, renounce, transfer or deliver, directly or indirectly, Shares subscribed for by you in the United States, Australia, Canada, Japan, the Republic of South Africa, New Zealand or in any jurisdiction in which such offers or sales are unlawful (“Excluded Territories”) or to any US Person or resident of Australia, Canada, Japan, the Republic of South Africa, New Zealand or any Excluded Territories, or: (y) release or otherwise forward, distribute or send any materials on this website in or into the United States, Australia, Canada, Japan, the Republic of South Africa, New Zealand or any Excluded Territories.

Shares offered by the Company have not been and will not be registered under the Securities Act or with any securities regulatory authority of any State or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, US Persons (within the meaning of Regulation S under the Securities Act). The Company has not been and will not be registered as an “investment company” under the United States Investment Company Act of 1940 and investors will not be entitled to the benefits of that Act. In addition, relevant clearances have not been, and will not be, obtained from the securities commission (or equivalent) of any province of Australia, Canada, Japan, the Republic of South Africa, New Zealand or any Excluded Territories and, accordingly, unless an exemption under any relevant legislation or regulations is applicable, none of the Shares may be offered, sold, renounced, transferred or delivered, directly or indirectly, in Australia, Canada, Japan, the Republic of South Africa, New Zealand or any Excluded Territories.

Unless expressly indicated otherwise on a section of this website or particular document, the contents of this website are not a financial promotion and none of the contents of this website constitute an invitation or inducement to engage in investment activity. If and to the extent that this website or any of its contents are deemed to be a financial promotion, the Company is relying on the exemption provided by Article 69 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005/1529 in respect of section 21 of the Financial Services and Markets Act 2000. In particular, any information in respect of past performance (including without limitation past performance of the Company, its group, shares in the Company and/or the Company’s portfolio) cannot be relied upon as a guide to future performance.

Any person accessing the website should carefully review the Terms and conditions of the website. By using the website, you indicate that you accept the Terms and conditions and that you agree to abide by them. If you do not agree to the Terms and conditions, please refrain from using the website.

PLEASE CHECK THE BOX BELOW TO CONFIRM THAT:

  • YOU HAVE READ, UNDERSTOOD AND AGREE TO THE ABOVE;
  •  YOU ARE NOT IN THE UNITED STATES OR IN ANY OTHER JURISDICTION WHERE ACCESSING THIS WEBSITE MAY BE PROHIBITED BY LAW;
  • YOU ARE NOT A US PERSON OR OTHERWISE A RESIDENT OF AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR ANY EXCLUDED TERRITORY; AND
  • YOU ARE NOT INVESTING OR OTHERWISE ACTING FOR THE ACCOUNT OR BENEFIT OF A US PERSON OR A RESIDENT OF AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR ANY EXCLUDED TERRITORY.

This field is required.

Continue