Industrials REIT, the UK multi-let industrial (“MLI”) property company, today publishes a trading update on its MLI portfolio for the period 1 January 2023 to 31 March 2023 and up-to-date rent collection across the Company’s whole portfolio. 

Commenting on the trading update Paul Arenson, CEO of Industrials REIT, said:  

“Our final trading update of the financial year has seen continued strong underlying occupational conditions in the MLI market driven by high demand, limited supply and affordable rents.  Whilst the macro-economic backdrop remains challenging in the UK, our MLI portfolio has delivered on target, with 4.8% like-for-like growth in passing rents and 10.6% growth in estimated rental values over the 12 month period. 

“The Industrials Hive platform continues to support the business by generating a strong pipeline of new lettings and enabling the business to transact with increasing efficiency.  During the quarter, we concluded 120 leasing transactions taking the total for the financial year to 401, a 50% increase on the prior year.  We saw average uplifts in rent of 27% on all lettings signed during the quarter, totalling a further £2.6 million of rent, with 73% of new lettings on Smart Lease® terms and conditions and over 82% of leases including 3% p.a. fixed uplifts.  Furthermore, in the small number of instances where units have been handed back due to tenant move-outs, insolvency or forfeiture, demand remains sufficiently robust to maintain occupancy levels and to continue delivering rental growth.

“Finally, in early April, we completed the sale of our interest in a care homes joint venture in Germany, representing the completion of the non-MLI asset disposal programme we started in March 2018, following the initial acquisition of 25 MLI estates in June 2017, and completing our transition into a fully focused MLI operating business. This transaction released approximately £15 million in equity, which we intend to reinvest in accretive MLI opportunities in the UK.

“Despite the economic headwinds, the MLI occupational market remains robust and supportive of rental growth. However, Industrials REIT is not immune to these forces, and during this period is likely to see a proportion of top line revenue growth eroded by higher interest rates and cost base inflation. Nevertheless, the business remains well positioned to weather the storm with a low level of debt and a highly diversified customer base and portfolio.”