Stenprop on track with MLI strategy


Stenprop on track with MLI strategy


Published Date: 2019-11-25 | Source: Stephen Gunnion | Author: Stephen Gunnion

Stenprop on track with MLI strategy

The real estate investment trust is bringing more of its German properties to market as it focuses on the UK industrial sector.

Stenprop says it's on track to becoming the UK's leading multi-let industrial (MLI) business as it continues to sell its other properties and recycle the proceeds into industrial estates in the UK. With most of its UK non-MLI assets now sold, the group said it's left with some German properties to dispose of. And given strong valuations in that market, it plans accelerate sales without waiting for suitable acquisition targets to come to market.

The retail estate investment trust company's strategic objective is to deliver sustainable, growing income to shareholders. It believes it can achieve this by becoming a specialised MLI property company. The sector is expected to be more resilient than other parts of the commercial real estate sector in the run up to Brexit - and beyond.

The value of the group's multi-let industrial assets has increased to £292 million and now make up almost 45% of its £655 million portfolio. MLI assets are expected to comprise approximately 60% of Stenprop's total portfolio of properties by the end of March next year.

At the half-year stage, Stenprop earned just over half of its net rental income from its MLI portfolio, up from 32% last September. It bought eight MLI estates over the period for an aggregate purchase price of £23.9 million.

Like-for-like growth in its total portfolio valuation was up 3.5% for the six-month period, of while the MLI portfolio was 2.5%. It completed 90 new lettings and lease renewals in the MLI portfolio for an average 4.36 years at an average rental which was almost 20% above the passing rent previously payable on the units.

Diluted IFRS earnings per share (EPS) declined by 1% to 4.59p over the period, while diluted adjusted EPS using European Public Real Estate Association (EPRA) methodology fell 35% to 3.41p due to a £5 million reduction in net management fee income after it exited its management activities. It held its interim dividend steady at 3.375p per share. Its diluted EPRA net asset value per share increased by 2.1% to £1.44.

Stenprop said it was at an advanced state in the sales process for its Bleichenhof property in Hamburg and it intended to bring its three Berlin retail centres and its portfolio of five retail warehouses to market in January. The combined sterling valuation of all of these properties at the end of September was £230 million.


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