SOLID HALF YEAR RESULTS UNDERPINNED BY STRONG RENTAL DEMAND

Industrials REIT Limited (‘Industrials REIT’ or the ‘Company’ and together with its subsidiaries, the ‘Group’), the specialist UK multi-let industrial (‘MLI’) property company, announces results for the six months to 30 September 2022.

Commenting on the results Paul Arenson, CEO of Industrials REIT, said: “Strong occupier demand has continued to drive substantial rental uplifts across our UK MLI portfolio over the first half of the year. Our assets remain highly affordable and continue to attract an increasingly diverse range of businesses and now comprise over 1,500 separate occupiers. In this period, the average passing rent increased by a record 29% on new lettings and lease renewals. Our Industrials Hive platform continues to deliver efficiencies. The Group is well positioned to weather pressure on valuations and rising debt costs, given that our group LTV remains low at 26.5% and Group debt is 90% hedged. We anticipate that the current macroeconomic headwinds will see the investment market go through a period of repricing and we look forward to being able to capitalise on opportunities once the operating environment stabilises.”

MLI Operational Highlights: Strong demand delivers record rental growth/uplifts

• Demand for MLI space outstripping supply with the average passing rent increasing by 29% on new lettings and lease renewals in the period, the highest growth rate achieved to date
• Eight consecutive quarters of 20%+ average growth in rent at lease renewal or upon new letting now recorded
• Industrials Hive, our operating platform, delivered operational efficiencies across leasing, invoicing, and asset management and is a critical tool which will enable scale opportunities
• 4.0% growth in like-for-like annual passing rent after adjusting for one particular rent-free which expired in November 2022 (2021: 5.0%)
• 12.3% increase in like-for-like annual ERV (2021: 5.1%) demonstrating the further potential for future rental growth
• Industrials.co.uk website users up 9.0% on a 12-month rolling basis
• 197 letting transactions completed (2021: 119), with average lease incentives given now less than 1 month rent-free on an average4.5 year lease
• Further 49 leasing transactions on 187,627 sq ft of space completed in October and November 2022, demonstrating the depth of demand for MLI space (2021: 43 transactions)
• Occupancy of 92.8% reduced marginally (31 March 2022: 93.6%) as a result of proactive steps taken to forfeit and replace non-performing Covid-era tenancies

Financial Highlights: Solid results and a robust balance sheet

• Declared a covered interim dividend of 3.50 pence per share, up 3.7% on the prior year interim dividend of 3.375p per share
• Diluted IFRS loss per share of 7.18 pence (2021: 13.34 pence profit) driven by like-for-like portfolio valuation decline of 4.5% (2021: 9.8% increase)
• 2.6% growth in adjusted EPS to 3.54 pence (2021: 3.45 pence)
• Diluted IFRS net asset value per share of £1.66 (31 March 2022: £1.763) and a 7.4% decrease in EPRA NTA per share to £1.62 (31 March 2022: £1.753)
• Portfolio value decreased 4.3% to £656.5 million (31 March 2022: £685.8 million), reflecting yield softening in the period
• Low LTV of 26.5% with no refinancing until 2025
• 90% of Group debt at fixed rates or hedged against rising interest rates until November 2024 (excluding the care homes joint venture which is in a sale process)
• Total accounting return of -5.4% for the six-month period (2021: +9.8%)

News in full

Below is a link to the Half Year Results Update Webinar