Industrials REIT completes two acquisitions

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Industrials REIT completes two acquisitions
Credit: © Reuters.

This aptly named REIT has been on a mission to acquire multi-let industrial properties. This asset class is all the rage at the moment. The big question is whether the valuations will normalise as the pandemic subsides or whether they will continue to command high prices.

The latest news from Industrials REIT (which used to be called Stenprop (JO: MLIJ ) Limited) is that two acquisitions have been completed for a total consideration of GBP17 million. The properties are in the UK and were acquired on a blended net initial yield of 5.8%.

Beacon Business Park in Wales has been acquired for GBP7.9 million on a net initial yield of 6%. It is 97% occupied and the vendor is providing a six-month guarantee on the vacant unit, which is in the process of being let out.

A further three terraces in Belmont Industrial Estate in Durham, England have been acquired for GBP9.1 million on a net initial yield of 5.7%. The property is 87% occupied by 26 tenants and the vendor has provided a six-month guarantee on the vacant units. The company previously invested in this estate in November 2020.

Remember, property valuations work inversely with the yield. If the yield is higher, it means the purchase price was relatively lower. If the yield is lower, the purchase price was higher.

The company is focused purely on multi-let industrial in its strategy. After these deals and the disposal of a property in Switzerland, the multi-let industrial portfolio is now 95% of the group's total assets.

Property sector share prices have done well in the past year and this REIT is no exception, with the share price up more than 45% over the past year.

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