Two share placings aim to raise total of £86m to drive growth and profitability

Andrew Bird

Warehouse REIT has announced a share placing worth £45.9m linked to the acquisition of two new properties, and two others under offer.

Manchester-based finance group Distribution Finance has also, today, launched a £40m funding raise.

AIM-listed Warehouse REIT, which operates out of Chester, said the placing proceeds, together with the group’s existing facilities, will be used to help finance the acquisition of two adjacent distribution warehouses in Harlow for £13.9m, and two further assets, which are under offer

The two purpose-built modern multi-let warehouse estates under offer are located in two separate premier UK business locations, both being in very close proximity to key transportation hubs. The purchase of these assets will cost £43.5m, leading to a combined cost of £57.4m.

Since July 2020, the group has completed on £162m of acquisitions, totaling 1.8 million sq ft and taking the portfolio to approximately 7.9 million sq ft.

The group said it has an attractive pipeline of further near-term acquisition opportunities which amounts to £263.3m.

Andrew Bird, managing director of investment advisor, Tilstone Partners, said: “We are seeing unprecedented demand for modern, fit-for purpose warehouse space in economically relevant locations, underpinned by e-commerce growth which has accelerated as businesses of all size look to adapt and future proof their operations.

“Having committed to an investment strategy founded on this evolution back in 2013, the company has been able to amass a portfolio of scale, delivering both rental and capital growth, even against the backdrop of the current pandemic, allowing for the generation of significant returns for shareholders.

“Despite increasing competition for exposure to what has been a standout performing asset class, a combination of our on the ground intelligence and deep relationships and a wide pool of motivated sellers has seen the company deploy the proceeds from last year’s capital raise on schedule and into highly attractive opportunities, offering both strong day one income and longer-term asset management opportunities.

“Having identified a sizeable pipeline, at what we believe is favourable pricing and which will be immediately accretive, we look forward, with shareholder support, to building on this momentum.”

Meanwhile, Deansgate-based Distribution Finance Capital Holdings announced plans to raise £40m in a share placing.

The company includes DF Capital Bank Limited, a newly-authorised bank providing personal savings products and working capital solutions to dealers and manufacturers across the UK.

The placing shares represent approximately 68.2% of the ordinary shares in issue.

Distribution Finance said the proceeds will be used to accelerate the group’s business plan and loan book growth by unlocking a significant and current pipeline of demand, allowing the group to provide larger facilities to select customers, and removing the current £270m constraint on the loan book, which should support a loan book of up to £550m.

DF Capital chief executive, Carl D’Ammassa, said: “2020 was a strong year of delivery for the group.

“Having received our banking licence and successfully launched our retail savings products, we now have sustainable low cost funding in place that supports our growth plans.

“We have a proven track record of highly secured lending and have navigated the impact of COVID-19 well.

“Our working capital products are in demand and we see additional near term opportunities to provide funding to dealers and manufacturers to support their needs.

“The placing announced today will help us accelerate our business plan and unlock potential further growth opportunities, bringing forward our run-rate profitability.”

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