INDUSTRIAL PROPERTY SECTOR
How Atlantic Leaf is making its mark on UK real estate
Atlantic Leaf is hitting its stride under the leadership of CEO Paul Leaf-Wright as it builds a presence in the UK’s industrial real estate market.
Its assets have grown more than 10-fold since it listed in April 2014 — from £27m (R481m) to £386m (R6.87bn) at the end of May and could double in the next five years, Leaf-Wright said on Wednesday.
His focus has been on buying industrial properties that are let out to more than one tenant, especially companies that work in warehousing and distribution. This has brought Atlantic Leaf into a highly competitive part of UK real estate.
Leaf-Wright said on the sidelines of the release of financial results for the three months to May that while retail sales were under pressure, industrial and, to a lesser extent, office properties were performing well.
The UK economy was gaining momentum, providing a boost to Atlantic Leaf, which achieved strong results for the three months to May, reporting that adjusted headline earnings per share grew 2.6% in pound terms. The UK economy grew at 0.3% in May, helped by the royal wedding and warm weather, according to the UK’s Office for National Statistics.
"We are targeting overall growth in our earnings of 5% for the year to February and are very much on track. We are also becoming a real estate investment trust and will then be comparable with other South African-listed UK-based industrial-focused funds like Stenprop and will receive similar tax benefits. Right now we pay tax on our profits but when we are a Reit, shareholders will receive the majority of our income and pay tax on it," said Leaf-Wright.
Atlantic Leaf is trying to grow its presence in the multi-let industrial sector, including warehousing, which offers strong demand in the UK as online retail penetration rises.
The CEO said the three-month period saw Atlantic Leaf acquire an industrial and office property known as Deacon Park in Knowsley. "The Deacon Park property acquired in March 2018 is our first property that is multitenanted and Atlantic Leaf pays all utilities on this property.
"These expenses have been included in property operating expenses. Atlantic Leaf recovers these costs from the tenants and this income has been included as tenant recoveries," he said.
"This acquisition brings the total assets under management to £383m, including our proportional share of our joint venture with London Metric," said Leaf-Wright.