Urban Logistics announces £23m forward funding at two sites
Specialist industrial and logistics property investor Urban Logistics announced the £23m forward funding of two development sites on Wednesday.
The AIM-traded real estate investment trust said it had exchanged contracts with Wilson Bowden Developments, conditional on receipt of planning permission, for the forward funding of five urban logistics assets at Nottingham and Leicester.
All assets were expected to achieve an EPC 'A' rating.
The maximum commitment for the acquisition would be £23m, which would be financed from a combination of the company's cash resources, the sale of logistics properties and debt financing.
Urban Logistics said the development yield on cost was 6.12%.
The 8.1-acre site at Blenheim Park in Nottingham would comprise four units with a total gross internal floor area of 166,330 square feet.
It said Blenheim Park benefited from a location that was one mile from junction 26 of the M1 motorway.
The 2.5-acre site at Optimus Point in Leicester, meanwhile, would comprise one unit with a gross internal floor area of 43,850 square feet.
Optimus Point benefited from direct access to junction 21a of the M1 motorway.
The company said that during construction, which was expected to begin in September, it would benefit from a 5.5% interest rate coupon on the forward funding provided.
Practical completion was expected between September 2022 and February 2023.
The company said it had an option over two further sites until July, which were also in locations seeing strong rental growth and yield compression for new 'grade A' stock.
“Covid-19 has highlighted the importance of warehousing and logistics real estate, especially the scarce, high-quality, single-occupier regional and last mile urban properties on which the company focuses,” said chief executive officer Richard Moffitt.
“The development programme announced today, which we have sourced off market, will add further high-quality new assets to the company's portfolio at a time when smaller urban logistics warehouses are in short supply.
“Given the strength of demand for space from occupiers seeking representation in the East Midlands market, we expect to achieve favourable lease terms on each of the assets with high quality tenant counterparties.”
At 0904 GMT, shares in Urban Logistics REIT were down 0.3% at 146.06p.