Warehouse REIT chases £150m through AIM flotation

The newly incorporated closed-ended investment company, Warehouse REIT announced on Monday it was seeking to raise £150m through a placing and flotation on London's AIM market.

Warehouse REIT said it intended to use funds raised from the offering to capitalise on the demand for more centrally located warehouse spaces as a result of the boom in e-commerce sales that is expected to double by 2021.

In 2007, demand for warehouses from online retailers accounted for just 1% of the UK take-up but by 2016 that figure had grown to 29%.

"The change in the market dynamic is clear, with online sales projected to grow to nearly double by 2021," the company said in a statement.

"The low availability of rental stock together with increased demand will give rise to the potential for rental growth," it added.

Management was targeting a dividend yield of 5.5p or 5.5% for the 12 months to 31 March 2019 and a total return of at least 10% via dividends and net asset value appreciation.

The placing close date was 15 September with the group that provides warehouses for Amazon and Boots offering 150m shares for up to £1.0, with trading expected to begin on 20 September.

Andrew Bird, managing director of Tilstone, said Warehouse REIT presented an opportunity to "continue to build a diverse UK warehouse property portfolio which will benefit from the ongoing rental growth independently forecast to be 3% per annum over the next five years."