Atlantic Leaf buys UK industrial property
Real estate company takes a bet on property that services vehicle manufacturing
UK real estate company Atlantic Leaf Properties says it has completed the acquisition of an industrial property, Koito, in Droitwich Spa, UK, from Telereal Droitwich for £11.9m.
The company, which has its primary listing on the JSE, said the property “is located in the established business area of Hampton Lovett Industrial Estate, in central England, which also accommodates other large well-known industrial occupiers such as Amazon”.
“The acquisition … supports the company’s strategy to further concentrate its investment focus on the industrial sector,” the company said.
The property serves as the European headquarters for Koito Europe, a significant supplier to the European automotive industry specialising in the design and manufacture of vehicle lighting equipment.
Koito has been manufacturing vehicle components for more than 20 years for customers including Nissan, Suzuki, Toyota and Peugeot.
“The remaining lease term of 14.6 years provides sustainable income,” Atlantic Leaf said. The company also expects increased rentals over the period.
In May 2019, Atlantic Leaf indicated it wanted to join SA’s listed property index in the next two years so it can attract institutional investors and increase the liquidity of its shares.
The company had in the past struggled to raise capital because investor sentiment is subdued.
“We are finding it not too difficult to trade properties with other landlords in the UK. The challenge is getting investors to buy shares in a depressed sector. At least if we were in the Sapy (SA listed property index) and other major indices we could attract some SA institutions that want exposure to sterling-denominated returns,” Paul Leaf-Wright, founder of corporate advisory group Leaf Capital, said at the time.
Chief investment officer Shaun Fourie also said in April that Atlantic Leaf was set to perform strongly in its 2020 financial year.
“The retail warehouse and office portfolios had seen external valuations being lowered as result of market sentiment, while our industrial and logistics assets increased in value. We believe the inherent values of the portfolio remains sound in that we have still a weighted average lease time of close to ten 10 years and all our tenants are performing in line with the leases,” he said.
Atlantic Leaf was listed on the JSE and Mauritius Stock Exchange in March 2014 by Leaf-Wright.